Expedia Group's Q2 2023 Earnings Call: B2B Growth and Strategic Focus

Earnings call: Expedia Group highlights B2B growth and strategy By Investing.com

During a recent earnings call, Ariane Gorin, the CEO of Expedia Group (NASDAQ: EXPE), outlined the company's progress and strategic direction, particularly in its B2B segment. Expedia Group, known for consumer brands such as Expedia, Hotels.com, and Vrbo, reported $25 billion in bookings and over $100 million in room nights in 2023 for its B2B business. Gorin emphasized the B2B segment's consistent growth over the past five years and its distinct nature from the consumer business, driven by loyalty use cases, international markets, and corporate travel. With a strong hotel supply, distribution products, and technology, Expedia Group aims to capture more of the $1.2 trillion addressable market. In summary, Expedia Group's earnings call, led by CEO Ariane Gorin, shed light on the company's robust B2B growth and its strategy to further penetrate the travel market. While the B2C segment experiences its own set of challenges, the company is using its innovative strength to drive growth and customer loyalty. With a clear focus on investment and localization, Expedia Group is poised to adapt to the evolving travel landscape while capitalizing on its established market presence. Expedia Group (NASDAQ: EXPE) has demonstrated a strong commitment to shareholder value, as evidenced by management's aggressive share buyback strategy, a move that often signals confidence in the company's future prospects. This aligns with the company's strategic direction highlighted in the recent earnings call. Additionally, Expedia's impressive gross profit margins, which stood at 88.9% for the last twelve months as of Q2 2024, underscore the company's operational efficiency and its ability to maintain profitability in a competitive market. The company's stock has experienced significant price movements over the past few months, with a notable 28.71% return over the last three months, reflecting investor optimism. This performance is particularly relevant given the company's expansion efforts in the B2B sector and its plans to capitalize on the substantial addressable market. For investors seeking a deeper dive into Expedia's financial health and future outlook, InvestingPro offers additional insights. There are 16 more InvestingPro Tips available, including analysis on earnings revisions, P/E ratios, and debt levels, which can provide a more nuanced understanding of the company's performance and potential investment risks. InvestingPro Data also highlights that Expedia Group is trading at a P/E ratio of 23.92, suggesting a premium valuation relative to its near-term earnings growth. The company's market capitalization stands at $18.19 billion USD, reflecting its significant presence in the travel industry. With the next earnings date set for October 31, 2024, investors will be keen to see how the company's strategic investments and market approach will impact its financial results. For those interested in exploring these metrics and tips further, additional information is available at https://www.investing.com/pro/EXPE, where a comprehensive analysis can help investors make informed decisions. Lee Horowitz: I think that's our queue. So thanks so much for joining us. We're delighted to be closing out our 2024 Deutsche Bank (ETR:DBKGn) Technology Conference today with Ariane Gorin, the new CEO of Expedia Group. Prior to her role as CEO, Ariane has held multiple executive leadership roles at Expedia over 11 years, most recently serving as the President of the highly successful Expedia for Business Unit, which we will learn more about today. Prior to '21, Ms. Gorin served a number of senior positions, including President of Expedia Business Services, Expedia Partner Solutions, amongst others. Ariane will do a brief presentation and then we'll open it up for Q&A. So Ariane, the floor is yours. Thank you so much. Ariane Gorin: Okay. Thank you so much, Lee. So as we said, I'm going to start out by just sharing a bit more about our B2B business. As I've gotten spoke some time with our investors over the last few months in my new role. I get a lot of questions about B2B. And so what I wanted to do ahead of our conversation with Lee is just share a bit more about the business. I won't go through the normal safe harbor disclosure. But just, again, for those of you who may be less familiar with Expedia Group, as a reminder, we are a travel and technology company. We've got a number of big consumer brands Expedia, Hotels.com and Vrbo. And we have a big B2B business where we power partners, and that's what I'll talk about for the next few minutes. We also have a large media and advertising business. It's a business that was growing 28% in the second quarter. It sort of flows into both our consumer and our B2B businesses, and we think there's a big opportunity still in advertising. And of course, all of this is powered by our platform, our AI and machine learning platform. The last few years, we've gone through a big replatforming, especially on the consumer side of our business, and we're really happy with where we are. Great AI and machine learning capabilities, great ability to cross shop, to attach, cross-sell, fintech capabilities. I mean just, I would say, a very powerful platform. And of course, beneath all of this, excellent travel supply because in our business, it's important to have really great hotel relationships, airline, with everyone across the industry to have great access to rates and availability. Now let me just spend a few minutes on B2B. This is a business I know quite well. I was running it for about 10 years at Expedia Group before taking on this role. Even as Lee said, there were a lot of different acronyms and names in there over the years. It's a business that last year in 2023, did about $25 billion of bookings, over $100 million room nights, and we work with over 60,000 partners. And it wasn't just big last year. Over the last 5 years, we've had consistent growth in the business. And remember, some of this is during the time of COVID. Our gross bookings over 5 years, so from 2018 to 2023 grew at a 16% CAGR. Same thing for revenue our room nights were up 14% during that period on a CAGR and our adjusted EBITDA up 28%. So really fantastic growth over the last few years. I often get the question of, but is this -- how does this work with your B2C business? Is it cannibalizing or not? And I think it's really important to understand that a lot of these B2B bookings are on different use cases than what our consumer business goes after. So about 30% of the bookings in B2B come from use cases linked to loyalty. So either it's I have a credit card, and I'm using my loyalty points that I earn on the credit card for travel or maybe I'm a member of an airline loyalty program, and I want to use those airline points to burn on hotel. So those are people spending their loyalty currency or in a loyalty environment where they're using our inventory to redeem. So things that our brands wouldn't do themselves. 60% of those bookings come in geographies outside of the U.S. For those of you who know our U.S. -- our consumer business, you know that we have quite a big business in North America. Well, in B2B, 60% of our partners are doing business outside of the U.S. And then about 15% of our business comes from corporate travel. So this is where we have partnerships with travel management companies who themselves have relationships with end corporates, and we're powering them with our hotel supply. So all of those are really incremental to our consumer business. And when you think about what's the sort of target addressable market for us, the way I think of it is the travel industry is over $3 trillion. There's about $400 billion that comes from Expedia Group, Airbnb and Booking Holdings (NASDAQ:BKNG). There's another $1.4 trillion that is bookings from direct suppliers, so from hotel companies, from airlines and the like. And we do play a bit there. So as I said, for airlines, we can power their hotel programs. We power Marriott vacation packages, which is the package travel for them. But the biggest opportunity for us is in that other $1.2 trillion of bookings that happen in travel around the world, whether it's with corporate travel, off-line retail, loyalty companies and the like. And today, even if our business is big, we're only at 3% of the addressable market. So you might ask, okay, what are the differentiators and what gives you confidence in the business? And there are really 4 things that I talk about. The first is our strong hotel supply with great rates, margins and content. And I'll talk a bit more about that in a minute. The second is having great distribution products and technology. Our partners are always expecting us to have excellent technology, and that can be a differentiator. We've got a large growing and diversified partner base. And finally, we have a team that is expert and is laser-focused on this part of the business, both commercial and in technology. And we've had this stand-alone team just focused on B2B for quite a while now and it makes a difference, I believe, to have such focus. If I just talk about supply for a minute, we all know that in marketplace models, the more demand you bring the better your supply is because your supply partners want access to the demand that you're bringing. So our consumer business, obviously, is attractive to our supply partners, and that allows us to have great supply. When you bring the B2B demand into the equation, it just reinforces the value we're bringing to our supply partners and it, therefore, reinforces the quality of supply, we're able to bring our B2B partners. In terms of what our products are, let me just spend a minute explaining what are the 3 major products in our B2B business. The first is something we call Rapid. It's a hotel API. And think of it as a partner who wants to build their own travel experience, their own front end and they want to use us to get hotel content. They don't want to have direct hotel relationships themselves. They want to use us for rates, availability and content. And so they use our Rapid hotel API. The second is our white label template. So imagine you're an airline and you have your own sort of e-commerce stack, and you want to be able to sell hotels as well. But you want someone who's going to have a turnkey solution and is going to have the front end all the way to the back end. That's our white label template. And then finally, we have the travel agent affiliate program, and that's our solution for travel agents. And think of it as Expedia with a wrapper around it for a travel agency to log in to get access to our inventory and to see what kind of commissions they can make from it and to have the support that a travel agent would expect. So those are our 3 products. As I mentioned, we have a large growing and diversified partner base. Just on the slide, put a few examples of the partners we work with, but you can see that they're across financial institutions, other online travel agencies, offline travel agents, corporate travel management company, airlines, retailers and more, and they're all over the world. So just to summarize and before we get into the conversation with Lee, we believe that we're the leader in B2B and it's a business we scaled quite rapidly over the last few years. That B2B is incremental and has synergies to our B2C business. I believe that having these 2 stools makes us more successful as a company, it makes us more valuable to our supply partners and that they reinforce each other. Our business is differentiated and diversified across geographies and partner types. I didn't talk about it much. Maybe we'll get to it with Lee. We've said on recent earnings calls that we believe that the business will decelerate. It's been growing at over 20% a year for a number of quarters in a row. And as some of the global travel demand normalizes a bit. This business will slow some, but we believe it will continue to be a double-digit growing business. And finally, we'll continue to invest in the things that differentiate us in supply, in technology and in our team. And with that, Lee, I guess we'll have our conversation. Lee Horowitz: Great. Excellent. Thank you. A lot of great detail there. Q - Lee Horowitz: So let's dive into the B2B business, so a little bit more. So you talked about the double-digit growth, it's flowing but double digits. Of the, I guess, 3 drivers, maybe we would see it be sort of new customer acquisition, it's maybe volume through your partner portals and perhaps ARPU or spend per customer where they take on more services. Of those 3, how do you see sort of that sustainability of that double-digit growth, which of those 3 is sort of the biggest driver to that outcome? Ariane Gorin: So let me start with new business. So every year, we have a target for how much new business we're going to find. But the reality is that's a small portion of the overall number. But we keep a close eye on it because what is small this year, is going to be more important next year and the year after. So when we sign a deal, typically, by the second year, it produces 2 to 3x more than it did in the first year and then it just grows from there. So it's a -- most of our growth in year will come from the existing partner base growing within the existing partners or, for example, what we call the sophomores, so the second year of the things we signed in the previous year. And new business this year will have less impact on the in-year numbers. We have to keep an eye on it for the future. Lee Horowitz: Understood. And then this is a question we get a lot from investors who don't quite understand it, haven't had so much detail. They ask why wouldn't competitors move in, you have other B2C competitors that have similar call it, supply density, like amongst the things you highlight here in your B2B business, which you see as the most defensible. What is the hardest for someone to replicate if they wanted to move into, say, the B2B business more aggressively? Ariane Gorin: So first of all, I will say when we started to report B2B as a separate segment, it becomes obvious to people how that business is performing. And so if I were a competitor in the space and saw how Expedia is doing here, I would want to move into it as well. And so the sort of the competitive landscape. On your question of what's defensible. I sort of think of it as it's a combination of a lot of things, right? It's not just we have good supply or we have great technology with great uptime. It's also what are the tools that we give our partners for servicing, right? If a partner is using our API, they want to be able to build self-service into their front end and how good is our technology and allowing them to build that out. What are we doing on our commercials, how is our account manager interacting with them. So I would say it's sort of -- it's not just one thing. I always talk to the team that it's the wrapper of things that bring the value to our partners. Lee Horowitz: Understood. And you should presume we have a pretty strong feedback loop amongst those customers telling you what they want, what they need, how they need to -- how you can help them grow their business. I guess what do you get most commonly asked? Like what are your partners looking for? Where do they want you to invest the next dollar to help them grow their travel portals over time? Ariane Gorin: Yes. So the first thing is they want a reliable partner who's going to continue to invest in the B2B business. Years ago, as we were starting to grow this business, a question I kept on getting was how serious are you about this? Like B2B isn't that big in the overall Expedia Group ecosystem. So at some point, are you going to not invest. I think we're beyond that now. They know we're a trusted and reliable partner. It really depends on the partner and what they're looking for. Corporate partners will say, "Hey, we want more supply that has late checkout or we want more supply that fits our segment." Some partners might say, "Actually, we want you to build out some technology that allows us to have better servicing." I would say it's really partner segment dependent. And our team does a nice job of listening to partners hearing what it is that they want and then evolving our offer. Of course, as in any business, every partner always wants better economics. Lee Horowitz: Fair enough. And then you highlighted a large international part of your B2B business. But we'll dive in a little bit more on B2C. But on your B2C side, you're looking to expand more internationally. I guess when you think about perhaps the push and pull between those 2, how do you make that decision? How do you look at, say, an international market and decide, okay, maybe we move in a bit more with B2C versus trying to grow the partner ecosystem in that market to try to get some of the demand from that region via B2B? Ariane Gorin: Yes. Well, first, I would just say that we want both of our businesses, our consumer business and our B2B business to be growing well, and they should be -- and they can be in the same geographies or they can be in different geographies, but they both need to grow. The stories I love the most about B2B is a partner like Traveloka, who is an online travel agency in Indonesia, and when we started working with them years ago, we didn't have points of sale than Indonesia. This was a partner who -- they knew the local market. They had all the payment types. They knew the customer, and when they started looking at, okay, we have our local hotel supply for our local market, but people who are coming to Traveloka want to be able to travel to the U.S. We need a partner to provide that supply. And so that's where we come in. And I think for a lot of these, especially OTAs in some of the emerging markets, we're a great fit for them because we allow them to have a more full store without having to invest there. And then for our consumer brands, I believe there's a big opportunity for us to grow internationally. During COVID and the years after that as we were going through our replatforming, we focused much more in North America. And we now have brands that still have strong brand awareness in certain countries outside of North America, whereas we start to reinvest marketing, we're seeing good results. Lee Horowitz: Got it. So maybe that's a nice segue, right? So you highlighted some great B2B growth metrics there, but if we back out and look at the B2C business, right, since '18, now with the disclosures we have here, the B2C business is sort of flat to down. There's been a lot of moving pieces at Expedia. I guess what is it that -- can you just explain that a little bit more? Help us understand it? Is it some of the deprecated brands that you guys have moved away from over that period of time? You mentioned perhaps stepping away from international markets. Just any more color as it relates to what happened from your -- in your B2C business from '18 to today? Ariane Gorin: So as you said, first of all, we have, over the last few years, been going through a lot of replatforming activities. And during that time, we've been okay giving up some room nights as we were doing that. In addition, coming out of COVID, we invested less internationally. We migrated the hotel -- and I've talked about this before, we migrated the Hotels.com brand to the new platform. We changed the loyalty program. And so we gave up some room nights there. The good news is if you look at Brand Expedia and Vrbo between 2018 and 2023, bookings were growing. And then I would just say, finally, as you cited, we've got some smaller brands, Orbitz, Travelocity and the like that we've invested less in as we focused on our big 3 brands of Expedia, Vrbo and Hotels.com. Lee Horowitz: Got it. Okay. So then maybe focusing a little bit more on those big 3 B2C brands. Brand Expedia started to show, I think, 20% nights growth in the last quarter, makes you guys a very clear share winner in this part of the business. I guess what has gone so well for this part of the business? What has changed so dramatically over the last several years as it relates to maybe the velocity, the shape of traffic that you're driving to the platform. What's gone so right for Brand Expedia? Ariane Gorin: So of all the tech migrations we were going through the last few years, Expedia was the least disrupted brand. And in fact, it benefited from so much of our innovation. So it benefited from the new testing platform we put in place. We can test so much faster and therefore, innovate faster. It benefited from the work we did on one identity and having a loyalty program across all of our brands. It benefited from a lot of work we were doing to drive more direct traffic to get more in app. And finally, I would say, Expedia as a brand has an incredible value proposition. The fact that you can buy dynamic packages and you get better rates when you do that, that you can cross-sell with attach. With our new loyalty program, if you're a silver or gold member, you're getting better discounts. So I just think Expedia as a brand, it's a fantastic product. We -- as i said, we continue to work on attach, on planning capabilities. We've got this trip board that as part of our replatforming, which capability that was on Vrbo, and we rebuilt it in a way that it could be used on Expedia. And we know that when people use trip board for planning, they're more likely to repeat. So it's just -- it's a wonderful example of the benefits of the innovation we've been doing and also the brand building. Lee Horowitz: Understood. And then maybe just thinking of some of the other brands, I guess, how do you think about maybe the synergies that exist between, say, Brand Expedia and Hotels.com at this point? How do you position these 2 brands within the geography such that they complement one another and the improvements that you hope to get out of Hotels.com in the next couple of months and years, don't end up cannibalizing Brand Expedia in the process? Ariane Gorin: So I've distinguished between markets in which we've got all of our brands and markets in which maybe we don't. In a country like the U.S., where we've got Expedia, Hotels.com and Vrbo, part of the thinking behind launching One Key was that you would have a common currency across all of them. So if you have someone who is a loyal Hotels.com user, they would benefit from getting One Key cash. But then if they wanted to book a flight or a car, they could actually go and use that on Expedia, and you could drive that kind of cross-sell. There are other countries in which maybe the Hotels.com brand is stronger than Expedia, and we may lean into it. I would just say that as much as we would all love everyone to come to only one of our brands or -- people shop around. And by the way, the B2B business proves this because sometimes people look for corporate travel, sometimes people book with one loyalty currency. And if you look at the stats in the U.S., people who are booking multiple trips a year often book in multiple places. So what I'm focused with the team on is how do you have a great value proposition for people who want to come to Hotels.com, how do you have a great value proposition for people who want to come to Expedia and to Vrbo and you can tie them all together with One Key in the U.S. Lee Horowitz: Understood. And then maybe shifting to Vrbo. I guess what have you learned at Brand Expedia over the last 12 months that you believe is leverageable at Vrbo? How do you go about replicating the success you've had at Brand Expedia to drive Vrbo back to a point where it's a share winner within the broader alternative accommodations industry. Ariane Gorin: As I sort of talked about, I think the Expedia success has come from a lot of the innovation we've done, a lot of the testing and optimizing. We're really pleased with where we are on our hotel path and the conversion there. And we're doing the same thing on Vrbo. We've run more tests on Vrbo and on the Vrbo app this year already than we did all of last year. The teams are constantly looking at what more can we bring to our travelers. The other thing that's been great on Brand Expedia is the strength of our supply. And Vrbo historically has had strong supply. We've continued to grow at double digits. But more recently, we've done work on getting rid of hosts that weren't providing the level of experience that we wanted for our travelers, raising the bar in our sort of host programs. But I think truly, it's being clear on what are we bringing to people with Vrbo, whole homes, no host, a loyalty program, being very clear on those things, communicating them well, having a great app experience, driving more direct and driving repeat. And I think the loyalty program will also help us with that. Lee Horowitz: Understood. And then maybe a similar question, right? You've obviously done very well recently in sort of your U.S. hotel business. We talked about it briefly before. Some of your goals internationally. Again, what have you learned over the last year or so in sort of U.S. hotel that you plan to take the international markets to reinvigorate share gains in the next couple of months? Ariane Gorin: Like everything, it's focused, Lee. If you have a focused team something -- and we were very focused on improving our hotel path and driving value there. It is the same thing internationally. You start by saying, okay, what are the assets I have? In some of the countries, we have a really good brand awareness. We have great supply in part because of our B2B business. And so go back in with the marketing teams in a surgical way and test things, see where we're getting traction and then go from there. And we're pretty pleased with the results we're already seeing. Lee Horowitz: You highlighted some, I guess, large market opportunities. Maybe just talk perhaps a bit more specifically how the B2B and B2C businesses complement each other. There's obviously a big pie for you guys to go after. Do you think about them strategically separately? Or is it when you go after the overall market, these are our 2 big horses and we're going to go take share that way. Ariane Gorin: So at a company level, obviously, we look at how are we growing across the board. But then my expectations as the leaders of B2C and B2B are they're each trying to grow their businesses, and they have to have their strategies for growing their business. As I said before, I believe that they are complementary. They're not only complementary because when you go talk to a supply partner, now we're saying to them, look, by working with us, you're going to be able to tap into our loyalty members. Our silver and gold members who spend more, who stay on property longer, you're going to be able to -- if you want to participate in the package path, get these incremental travelers you couldn't get yourself. And with that same technology connection, we can help you go get the corporate travel business you want. We can help you tap into the demand from credit cards loyalty program. So it not only for us, strengthens our business to have both of them, but for our relationships with our supply partners and strengthening. And sorry, I would just add. For our B2B partners, the fact that we have a B2C business means that our technology is better, our content is better because it's constantly optimized for a consumer business. And so that's incredibly important to our B2B partners. Lee Horowitz: Understood. You've obviously done an incredible job shepherding that B2B business. The dynamics in B2B versus B2C are a bit different. What do you think is unique about your perspective of seeing all the success at B2B that you can bring to the sort of the B2C side of the house in order to continue the success in Expedia, reinvigorate growth at Hotels.com and Vrbo. How does your perspective of... Ariane Gorin: Well, I will start by saying I've maybe been a good shepherd, but I had a great team. The B2B team is a super team. In terms of what learnings that I take away from that for B2C, I think it's like any business. You have to look at the market and figure out where is the opportunity in the market? How do the assets that we have fit with customers out there want and then be clear on it, make bets, be great in marketing the messages, build great technology and then continue to iterate. And that's why I keep on going back to what is the brand value proposition for our 3 brands, right? Expedia is a brand that is a one-stop shop with flights, cars, hotels, activities, and you can book this multi-item trip and package in a really dynamic way and save. Hotels.com is a hotel pure player, it's very fast. You can book quickly. It may end up being a different use case than Expedia. And then Vrbo is whole homes, families, groups. So I think working with the teams to be really clear on those, and then to leverage all of the technology investments we've made the last couple of years and configure it in a way that makes sense for the brand and communicate it well through marketing. Lee Horowitz: Makes sense. Maybe stepping back a little bit. If we can perhaps discuss the macro environment a little bit. Things slowed for you and the rest of the industry in July in a manner that seemed to take some by surprise. I guess what specifically were you seeing in your business as it relates to that sort of weakening demand environment? And then how do you get confidence that this sort of surprise slowdown that we saw in July won't be the first of, say, many instances over the next year or so? Ariane Gorin: So I'd start by saying Q2 was healthy travel demand. And we were pleased we grew our bookings by 6%. It's true that July, and we had peers in the industry who are reporting the same thing, was a slowdown. Even in Q2, we've already seen declining air ticket prices and car rental price stays. In July, we started to see pressure on ADRs for hotels and some early signs of trade downs. I focus less on like what are the short-term trends and more on, one, the fact that the travel industry is huge. What we learned coming out of COVID is people really want to travel no matter what. And then two, just focusing our teams on the things that are within our control. We have a lot of execution opportunities ahead of us. And so I really talked to the team about let's on our own destiny and focus on executing what we know can work. Lee Horowitz: Understood. So you're now 4 months into the new role, I guess, maybe a catch all here, what has surprised you most to date from your new vantage point, where have you been either positively or perhaps even negatively surprised about the things you're seeing from the new seat? Ariane Gorin: Well, one thing is I don't -- I had appreciated how little some of our investors understood the B2B business. And so that's why I was very happy to -- thank you for the invitation, to come here today. What I -- what's been great to see is just how powerful the technology investments we've made over the last few years have been to allow us to move faster. So last quarter, we launched flexible deep search across all 3 of our big brands at the same time. So this is just the ability to search for, for example, a hotel with plus/minus 1, 2, 3 multiple days. It may sound sort of relatively simple. But in the past, we would have had to rebuild that 3x over. Same thing, the testing platform now that we've got it across all of our brands, we can get results of tests much faster. So I think it was one thing to be part of the management team and to hear about it, and it's another thing to really see the way it's helping us move faster. Lee Horowitz: Got it. And maybe one of the things that perhaps has changed a little bit in those first 4 months was the pause for the One Key global rollout. I guess, can you maybe just help us better understand the reasoning behind that pause? And maybe how you sort of came to that decision as one of maybe the larger strategic decisions in your early goings at Expedia? Ariane Gorin: So One Key we launched last summer in the U.S. And the idea is we've got 3 big brands, Expedia, Hotels.com and Vrbo in the U.S. And as I said, we know as much as we'd like people to be loyal to just one brand, they shop across multiple brands. And by creating a common currency across all of them, where you had a simple program where you could earn and redeem One Key cash across all of the brands where we had what we call tiered member deals, which were supplier-funded. So if you were a blue, silver or gold member, you get access to depot discounts, and that's rewarding you for your loyalty. Having those value propositions and then also encouraging cross-shopping across the brands, was really the thought around one key, and that's worked well in the U.S., and we've been pleased in that. We also just launched it in the U.K., which is another country where we have all 3 big brands operating. But when we look at it, we realized it hurt them to a certain extent, the Hotels.com brand because Hotels.com had a 10-for-1 value position. And I step back with the team and said, okay, we've rolled it out now in 2 countries look at the rest of the world. And I believe everything is local. And so you need to think what is going to work for that country. You want a tech platform that works globally, but then what's the value proposition that's going to work locally. And in a number of countries around the world, we don't have all 3 big brands. So what the team is now looking at is what is the value proposition that makes sense around loyalty in those other countries. And it's one of the tasks I've just been pushing the team on is what is going to drive growth for us in the few months to come. And just because we were on a path, it's okay to revisit things. Lee Horowitz: That makes sense. I think people appreciate it. And maybe sort of one final one to sort of wrap up the conference. I guess, from the new seat, from your new vantage point, what do you think is most misunderstood? Perhaps it's the B2B business, and we covered a lot of it, but anything else that you think investors misunderstand about your business at this point? Ariane Gorin: I think we've probably covered it. What I would also say is we're -- we've disclosed a little bit more. I mean obviously, we shared the B2B numbers here. Last quarter, we shared gross bookings for B2C and B2B. So hopefully, there are fewer things that are misunderstood. And maybe I would do the last, but I sort of have the -- for the past [indiscernible] our brands are really loved by travelers. Like I have been -- obviously, I grew up in the B2B side of the business. But see the passion people have for our brands is really overwhelming. And it gives you a great sense of responsibility to make sure that we're being good stewards of them. Lee Horowitz: Fair enough. Well, Ariane, thank you so much for your time. Thanks so much for joining us. Thank you, everyone, for coming to the conference. Ariane Gorin: Thank you, Lee.

Expedia Group, Inc. (EXPE) Deutsche Bank Technology Conference Call Transcript

I think that's our queue. So thanks so much for joining us. We're delighted to be closing out our 2024 Deutsche Bank Technology Conference today with Ariane Gorin, the new CEO of Expedia Group. Prior to her role as CEO, Ariane has held multiple executive leadership roles at Expedia over 11 years, most recently serving as the President of the highly successful Expedia for Business Unit, which we will learn more about today. Prior to '21, Ms. Gorin served a number of senior positions, including President of Expedia Business Services, Expedia Partner Solutions, amongst others. Ariane will do a brief presentation and then we'll open it up for Q&A. Okay. Thank you so much, Lee. So as we said, I'm going to start out by just sharing a bit more about our B2B business. As I've gotten spoke some time with our investors over the last few months in my new role. I get a lot of questions about B2B. And so what I wanted to do ahead of our conversation with Lee is just share a bit more about the business. I won't go through the normal safe harbor disclosure. But just, again, for those of you who may be less familiar with Expedia Group, as a reminder, we are a travel and technology company. We've got a number of big consumer brands Expedia, Hotels.com and Vrbo. And we have a big B2B business where we power partners, and that's what I'll talk about for the next few minutes. We also have a large media and advertising business. It's a business that was growing 28% in the second quarter. It sort of flows into both our consumer and our B2B businesses, and we think there's a big opportunity still in advertising. And of course, all of this is powered by our platform, our AI and machine learning platform. The last few years, we've gone through a big replatforming, especially on the consumer side of our business, and we're really happy with where we are. Great AI and machine learning capabilities, great ability to cross shop, to attach, cross-sell, fintech capabilities. I mean just, I would say, a very powerful platform. And of course, beneath all of this, excellent travel supply because in our business, it's important to have really great hotel relationships, airline, with everyone across the industry to have great access to rates and availability. Now let me just spend a few minutes on B2B. This is a business I know quite well. I was running it for about 10 years at Expedia Group before taking on this role. Even as Lee said, there were a lot of different acronyms and names in there over the years. It's a business that last year in 2023, did about $25 billion of bookings, over $100 million room nights, and we work with over 60,000 partners. And it wasn't just big last year. Over the last 5 years, we've had consistent growth in the business. And remember, some of this is during the time of COVID. Our gross bookings over 5 years, so from 2018 to 2023 grew at a 16% CAGR. Same thing for revenue our room nights were up 14% during that period on a CAGR and our adjusted EBITDA up 28%. So really fantastic growth over the last few years. I often get the question of, but is this -- how does this work with your B2C business? Is it cannibalizing or not? And I think it's really important to understand that a lot of these B2B bookings are on different use cases than what our consumer business goes after. So about 30% of the bookings in B2B come from use cases linked to loyalty. So either it's I have a credit card, and I'm using my loyalty points that I earn on the credit card for travel or maybe I'm a member of an airline loyalty program, and I want to use those airline points to burn on hotel. So those are people spending their loyalty currency or in a loyalty environment where they're using our inventory to redeem. So things that our brands wouldn't do themselves. 60% of those bookings come in geographies outside of the U.S. For those of you who know our U.S. -- our consumer business, you know that we have quite a big business in North America. Well, in B2B, 60% of our partners are doing business outside of the U.S. And then about 15% of our business comes from corporate travel. So this is where we have partnerships with travel management companies who themselves have relationships with end corporates, and we're powering them with our hotel supply. So all of those are really incremental to our consumer business. And when you think about what's the sort of target addressable market for us, the way I think of it is the travel industry is over $3 trillion. There's about $400 billion that comes from Expedia Group, Airbnb and Booking Holdings. There's another $1.4 trillion that is bookings from direct suppliers, so from hotel companies, from airlines and the like. And we do play a bit there. So as I said, for airlines, we can power their hotel programs. We power Marriott vacation packages, which is the package travel for them. But the biggest opportunity for us is in that other $1.2 trillion of bookings that happen in travel around the world, whether it's with corporate travel, off-line retail, loyalty companies and the like. And today, even if our business is big, we're only at 3% of the addressable market. So you might ask, okay, what are the differentiators and what gives you confidence in the business? And there are really 4 things that I talk about. The first is our strong hotel supply with great rates, margins and content. And I'll talk a bit more about that in a minute. The second is having great distribution products and technology. Our partners are always expecting us to have excellent technology, and that can be a differentiator. We've got a large growing and diversified partner base. And finally, we have a team that is expert and is laser-focused on this part of the business, both commercial and in technology. And we've had this stand-alone team just focused on B2B for quite a while now and it makes a difference, I believe, to have such focus. If I just talk about supply for a minute, we all know that in marketplace models, the more demand you bring the better your supply is because your supply partners want access to the demand that you're bringing. So our consumer business, obviously, is attractive to our supply partners, and that allows us to have great supply. When you bring the B2B demand into the equation, it just reinforces the value we're bringing to our supply partners and it, therefore, reinforces the quality of supply, we're able to bring our B2B partners. In terms of what our products are, let me just spend a minute explaining what are the 3 major products in our B2B business. The first is something we call Rapid. It's a hotel API. And think of it as a partner who wants to build their own travel experience, their own front end and they want to use us to get hotel content. They don't want to have direct hotel relationships themselves. They want to use us for rates, availability and content. And so they use our Rapid hotel API. The second is our white label template. So imagine you're an airline and you have your own sort of e-commerce stack, and you want to be able to sell hotels as well. But you want someone who's going to have a turnkey solution and is going to have the front end all the way to the back end. That's our white label template. And then finally, we have the travel agent affiliate program, and that's our solution for travel agents. And think of it as Expedia with a wrapper around it for a travel agency to log in to get access to our inventory and to see what kind of commissions they can make from it and to have the support that a travel agent would expect. So those are our 3 products. As I mentioned, we have a large growing and diversified partner base. Just on the slide, put a few examples of the partners we work with, but you can see that they're across financial institutions, other online travel agencies, offline travel agents, corporate travel management company, airlines, retailers and more, and they're all over the world. So just to summarize and before we get into the conversation with Lee, we believe that we're the leader in B2B and it's a business we scaled quite rapidly over the last few years. That B2B is incremental and has synergies to our B2C business. I believe that having these 2 stools makes us more successful as a company, it makes us more valuable to our supply partners and that they reinforce each other. Our business is differentiated and diversified across geographies and partner types. I didn't talk about it much. Maybe we'll get to it with Lee. We've said on recent earnings calls that we believe that the business will decelerate. It's been growing at over 20% a year for a number of quarters in a row. And as some of the global travel demand normalizes a bit. This business will slow some, but we believe it will continue to be a double-digit growing business. And finally, we'll continue to invest in the things that differentiate us in supply, in technology and in our team. And with that, Lee, I guess we'll have our conversation. Lee Horowitz Great. Excellent. Thank you. A lot of great detail there. So let's dive into the B2B business, so a little bit more. So you talked about the double-digit growth, it's flowing but double digits. Of the, I guess, 3 drivers, maybe we would see it be sort of new customer acquisition, it's maybe volume through your partner portals and perhaps ARPU or spend per customer where they take on more services. Of those 3, how do you see sort of that sustainability of that double-digit growth, which of those 3 is sort of the biggest driver to that outcome? Ariane Gorin So let me start with new business. So every year, we have a target for how much new business we're going to find. But the reality is that's a small portion of the overall number. But we keep a close eye on it because what is small this year, is going to be more important next year and the year after. So when we sign a deal, typically, by the second year, it produces 2 to 3x more than it did in the first year and then it just grows from there. So it's a -- most of our growth in year will come from the existing partner base growing within the existing partners or, for example, what we call the sophomores, so the second year of the things we signed in the previous year. And new business this year will have less impact on the in-year numbers. We have to keep an eye on it for the future. Lee Horowitz Understood. And then this is a question we get a lot from investors who don't quite understand it, haven't had so much detail. They ask why wouldn't competitors move in, you have other B2C competitors that have similar call it, supply density, like amongst the things you highlight here in your B2B business, which you see as the most defensible. What is the hardest for someone to replicate if they wanted to move into, say, the B2B business more aggressively? Ariane Gorin So first of all, I will say when we started to report B2B as a separate segment, it becomes obvious to people how that business is performing. And so if I were a competitor in the space and saw how Expedia is doing here, I would want to move into it as well. And so the sort of the competitive landscape. On your question of what's defensible. I sort of think of it as it's a combination of a lot of things, right? It's not just we have good supply or we have great technology with great uptime. It's also what are the tools that we give our partners for servicing, right? If a partner is using our API, they want to be able to build self-service into their front end and how good is our technology and allowing them to build that out. What are we doing on our commercials, how is our account manager interacting with them. So I would say it's sort of -- it's not just one thing. I always talk to the team that it's the wrapper of things that bring the value to our partners. Lee Horowitz Understood. And you should presume we have a pretty strong feedback loop amongst those customers telling you what they want, what they need, how they need to -- how you can help them grow their business. I guess what do you get most commonly asked? Like what are your partners looking for? Where do they want you to invest the next dollar to help them grow their travel portals over time? Ariane Gorin Yes. So the first thing is they want a reliable partner who's going to continue to invest in the B2B business. Years ago, as we were starting to grow this business, a question I kept on getting was how serious are you about this? Like B2B isn't that big in the overall Expedia Group ecosystem. So at some point, are you going to not invest. I think we're beyond that now. They know we're a trusted and reliable partner. It really depends on the partner and what they're looking for. Corporate partners will say, "Hey, we want more supply that has late checkout or we want more supply that fits our segment." Some partners might say, "Actually, we want you to build out some technology that allows us to have better servicing." I would say it's really partner segment dependent. And our team does a nice job of listening to partners hearing what it is that they want and then evolving our offer. Of course, as in any business, every partner always wants better economics. Lee Horowitz Fair enough. And then you highlighted a large international part of your B2B business. But we'll dive in a little bit more on B2C. But on your B2C side, you're looking to expand more internationally. I guess when you think about perhaps the push and pull between those 2, how do you make that decision? How do you look at, say, an international market and decide, okay, maybe we move in a bit more with B2C versus trying to grow the partner ecosystem in that market to try to get some of the demand from that region via B2B? Ariane Gorin Yes. Well, first, I would just say that we want both of our businesses, our consumer business and our B2B business to be growing well, and they should be -- and they can be in the same geographies or they can be in different geographies, but they both need to grow. The stories I love the most about B2B is a partner like Traveloka, who is an online travel agency in Indonesia, and when we started working with them years ago, we didn't have points of sale than Indonesia. This was a partner who -- they knew the local market. They had all the payment types. They knew the customer, and when they started looking at, okay, we have our local hotel supply for our local market, but people who are coming to Traveloka want to be able to travel to the U.S. We need a partner to provide that supply. And so that's where we come in. And I think for a lot of these, especially OTAs in some of the emerging markets, we're a great fit for them because we allow them to have a more full store without having to invest there. And then for our consumer brands, I believe there's a big opportunity for us to grow internationally. During COVID and the years after that as we were going through our replatforming, we focused much more in North America. And we now have brands that still have strong brand awareness in certain countries outside of North America, whereas we start to reinvest marketing, we're seeing good results. Lee Horowitz Got it. So maybe that's a nice segue, right? So you highlighted some great B2B growth metrics there, but if we back out and look at the B2C business, right, since '18, now with the disclosures we have here, the B2C business is sort of flat to down. There's been a lot of moving pieces at Expedia. I guess what is it that -- can you just explain that a little bit more? Help us understand it? Is it some of the deprecated brands that you guys have moved away from over that period of time? You mentioned perhaps stepping away from international markets. Just any more color as it relates to what happened from your -- in your B2C business from '18 to today? Ariane Gorin So as you said, first of all, we have, over the last few years, been going through a lot of replatforming activities. And during that time, we've been okay giving up some room nights as we were doing that. In addition, coming out of COVID, we invested less internationally. We migrated the hotel -- and I've talked about this before, we migrated the Hotels.com brand to the new platform. We changed the loyalty program. And so we gave up some room nights there. The good news is if you look at Brand Expedia and Vrbo between 2018 and 2023, bookings were growing. And then I would just say, finally, as you cited, we've got some smaller brands, Orbitz, Travelocity and the like that we've invested less in as we focused on our big 3 brands of Expedia, Vrbo and Hotels.com. Lee Horowitz Got it. Okay. So then maybe focusing a little bit more on those big 3 B2C brands. Brand Expedia started to show, I think, 20% nights growth in the last quarter, makes you guys a very clear share winner in this part of the business. I guess what has gone so well for this part of the business? What has changed so dramatically over the last several years as it relates to maybe the velocity, the shape of traffic that you're driving to the platform. What's gone so right for Brand Expedia? Ariane Gorin So of all the tech migrations we were going through the last few years, Expedia was the least disrupted brand. And in fact, it benefited from so much of our innovation. So it benefited from the new testing platform we put in place. We can test so much faster and therefore, innovate faster. It benefited from the work we did on one identity and having a loyalty program across all of our brands. It benefited from a lot of work we were doing to drive more direct traffic to get more in app. And finally, I would say, Expedia as a brand has an incredible value proposition. The fact that you can buy dynamic packages and you get better rates when you do that, that you can cross-sell with attach. With our new loyalty program, if you're a silver or gold member, you're getting better discounts. So I just think Expedia as a brand, it's a fantastic product. We -- as i said, we continue to work on attach, on planning capabilities. We've got this trip board that as part of our replatforming, which capability that was on Vrbo, and we rebuilt it in a way that it could be used on Expedia. And we know that when people use trip board for planning, they're more likely to repeat. So it's just -- it's a wonderful example of the benefits of the innovation we've been doing and also the brand building. Lee Horowitz Understood. And then maybe just thinking of some of the other brands, I guess, how do you think about maybe the synergies that exist between, say, Brand Expedia and Hotels.com at this point? How do you position these 2 brands within the geography such that they complement one another and the improvements that you hope to get out of Hotels.com in the next couple of months and years, don't end up cannibalizing Brand Expedia in the process? Ariane Gorin So I've distinguished between markets in which we've got all of our brands and markets in which maybe we don't. In a country like the U.S., where we've got Expedia, Hotels.com and Vrbo, part of the thinking behind launching One Key was that you would have a common currency across all of them. So if you have someone who is a loyal Hotels.com user, they would benefit from getting One Key cash. But then if they wanted to book a flight or a car, they could actually go and use that on Expedia, and you could drive that kind of cross-sell. There are other countries in which maybe the Hotels.com brand is stronger than Expedia, and we may lean into it. I would just say that as much as we would all love everyone to come to only one of our brands or -- people shop around. And by the way, the B2B business proves this because sometimes people look for corporate travel, sometimes people book with one loyalty currency. And if you look at the stats in the U.S., people who are booking multiple trips a year often book in multiple places. So what I'm focused with the team on is how do you have a great value proposition for people who want to come to Hotels.com, how do you have a great value proposition for people who want to come to Expedia and to Vrbo and you can tie them all together with One Key in the U.S. Lee Horowitz Understood. And then maybe shifting to Vrbo. I guess what have you learned at Brand Expedia over the last 12 months that you believe is leverageable at Vrbo? How do you go about replicating the success you've had at Brand Expedia to drive Vrbo back to a point where it's a share winner within the broader alternative accommodations industry. Ariane Gorin As I sort of talked about, I think the Expedia success has come from a lot of the innovation we've done, a lot of the testing and optimizing. We're really pleased with where we are on our hotel path and the conversion there. And we're doing the same thing on Vrbo. We've run more tests on Vrbo and on the Vrbo app this year already than we did all of last year. The teams are constantly looking at what more can we bring to our travelers. The other thing that's been great on Brand Expedia is the strength of our supply. And Vrbo historically has had strong supply. We've continued to grow at double digits. But more recently, we've done work on getting rid of hosts that weren't providing the level of experience that we wanted for our travelers, raising the bar in our sort of host programs. But I think truly, it's being clear on what are we bringing to people with Vrbo, whole homes, no host, a loyalty program, being very clear on those things, communicating them well, having a great app experience, driving more direct and driving repeat. And I think the loyalty program will also help us with that. Lee Horowitz Understood. And then maybe a similar question, right? You've obviously done very well recently in sort of your U.S. hotel business. We talked about it briefly before. Some of your goals internationally. Again, what have you learned over the last year or so in sort of U.S. hotel that you plan to take the international markets to reinvigorate share gains in the next couple of months? Ariane Gorin Like everything, it's focused, Lee. If you have a focused team something -- and we were very focused on improving our hotel path and driving value there. It is the same thing internationally. You start by saying, okay, what are the assets I have? In some of the countries, we have a really good brand awareness. We have great supply in part because of our B2B business. And so go back in with the marketing teams in a surgical way and test things, see where we're getting traction and then go from there. And we're pretty pleased with the results we're already seeing. Lee Horowitz You highlighted some, I guess, large market opportunities. Maybe just talk perhaps a bit more specifically how the B2B and B2C businesses complement each other. There's obviously a big pie for you guys to go after. Do you think about them strategically separately? Or is it when you go after the overall market, these are our 2 big horses and we're going to go take share that way. Ariane Gorin So at a company level, obviously, we look at how are we growing across the board. But then my expectations as the leaders of B2C and B2B are they're each trying to grow their businesses, and they have to have their strategies for growing their business. As I said before, I believe that they are complementary. They're not only complementary because when you go talk to a supply partner, now we're saying to them, look, by working with us, you're going to be able to tap into our loyalty members. Our silver and gold members who spend more, who stay on property longer, you're going to be able to -- if you want to participate in the package path, get these incremental travelers you couldn't get yourself. And with that same technology connection, we can help you go get the corporate travel business you want. We can help you tap into the demand from credit cards loyalty program. So it not only for us, strengthens our business to have both of them, but for our relationships with our supply partners and strengthening. And sorry, I would just add. For our B2B partners, the fact that we have a B2C business means that our technology is better, our content is better because it's constantly optimized for a consumer business. And so that's incredibly important to our B2B partners. Lee Horowitz Understood. You've obviously done an incredible job shepherding that B2B business. The dynamics in B2B versus B2C are a bit different. What do you think is unique about your perspective of seeing all the success at B2B that you can bring to the sort of the B2C side of the house in order to continue the success in Expedia, reinvigorate growth at Hotels.com and Vrbo. How does your perspective of... Ariane Gorin Well, I will start by saying I've maybe been a good shepherd, but I had a great team. The B2B team is a super team. In terms of what learnings that I take away from that for B2C, I think it's like any business. You have to look at the market and figure out where is the opportunity in the market? How do the assets that we have fit with customers out there want and then be clear on it, make bets, be great in marketing the messages, build great technology and then continue to iterate. And that's why I keep on going back to what is the brand value proposition for our 3 brands, right? Expedia is a brand that is a one-stop shop with flights, cars, hotels, activities, and you can book this multi-item trip and package in a really dynamic way and save. Hotels.com is a hotel pure player, it's very fast. You can book quickly. It may end up being a different use case than Expedia. And then Vrbo is whole homes, families, groups. So I think working with the teams to be really clear on those, and then to leverage all of the technology investments we've made the last couple of years and configure it in a way that makes sense for the brand and communicate it well through marketing. Lee Horowitz Makes sense. Maybe stepping back a little bit. If we can perhaps discuss the macro environment a little bit. Things slowed for you and the rest of the industry in July in a manner that seemed to take some by surprise. I guess what specifically were you seeing in your business as it relates to that sort of weakening demand environment? And then how do you get confidence that this sort of surprise slowdown that we saw in July won't be the first of, say, many instances over the next year or so? Ariane Gorin So I'd start by saying Q2 was healthy travel demand. And we were pleased we grew our bookings by 6%. It's true that July, and we had peers in the industry who are reporting the same thing, was a slowdown. Even in Q2, we've already seen declining air ticket prices and car rental price stays. In July, we started to see pressure on ADRs for hotels and some early signs of trade downs. I focus less on like what are the short-term trends and more on, one, the fact that the travel industry is huge. What we learned coming out of COVID is people really want to travel no matter what. And then two, just focusing our teams on the things that are within our control. We have a lot of execution opportunities ahead of us. And so I really talked to the team about let's on our own destiny and focus on executing what we know can work. Lee Horowitz Understood. So you're now 4 months into the new role, I guess, maybe a catch all here, what has surprised you most to date from your new vantage point, where have you been either positively or perhaps even negatively surprised about the things you're seeing from the new seat? Ariane Gorin Well, one thing is I don't -- I had appreciated how little some of our investors understood the B2B business. And so that's why I was very happy to -- thank you for the invitation, to come here today. What I -- what's been great to see is just how powerful the technology investments we've made over the last few years have been to allow us to move faster. So last quarter, we launched flexible deep search across all 3 of our big brands at the same time. So this is just the ability to search for, for example, a hotel with plus/minus 1, 2, 3 multiple days. It may sound sort of relatively simple. But in the past, we would have had to rebuild that 3x over. Same thing, the testing platform now that we've got it across all of our brands, we can get results of tests much faster. So I think it was one thing to be part of the management team and to hear about it, and it's another thing to really see the way it's helping us move faster. Lee Horowitz Got it. And maybe one of the things that perhaps has changed a little bit in those first 4 months was the pause for the One Key global rollout. I guess, can you maybe just help us better understand the reasoning behind that pause? And maybe how you sort of came to that decision as one of maybe the larger strategic decisions in your early goings at Expedia? Ariane Gorin So One Key we launched last summer in the U.S. And the idea is we've got 3 big brands, Expedia, Hotels.com and Vrbo in the U.S. And as I said, we know as much as we'd like people to be loyal to just one brand, they shop across multiple brands. And by creating a common currency across all of them, where you had a simple program where you could earn and redeem One Key cash across all of the brands where we had what we call tiered member deals, which were supplier-funded. So if you were a blue, silver or gold member, you get access to depot discounts, and that's rewarding you for your loyalty. Having those value propositions and then also encouraging cross-shopping across the brands, was really the thought around one key, and that's worked well in the U.S., and we've been pleased in that. We also just launched it in the U.K., which is another country where we have all 3 big brands operating. But when we look at it, we realized it hurt them to a certain extent, the Hotels.com brand because Hotels.com had a 10-for-1 value position. And I step back with the team and said, okay, we've rolled it out now in 2 countries look at the rest of the world. And I believe everything is local. And so you need to think what is going to work for that country. You want a tech platform that works globally, but then what's the value proposition that's going to work locally. And in a number of countries around the world, we don't have all 3 big brands. So what the team is now looking at is what is the value proposition that makes sense around loyalty in those other countries. And it's one of the tasks I've just been pushing the team on is what is going to drive growth for us in the few months to come. And just because we were on a path, it's okay to revisit things. Lee Horowitz That makes sense. I think people appreciate it. And maybe sort of one final one to sort of wrap up the conference. I guess, from the new seat, from your new vantage point, what do you think is most misunderstood? Perhaps it's the B2B business, and we covered a lot of it, but anything else that you think investors misunderstand about your business at this point? Ariane Gorin I think we've probably covered it. What I would also say is we're -- we've disclosed a little bit more. I mean obviously, we shared the B2B numbers here. Last quarter, we shared gross bookings for B2C and B2B. So hopefully, there are fewer things that are misunderstood. And maybe I would do the last, but I sort of have the -- for the past [indiscernible] our brands are really loved by travelers. Like I have been -- obviously, I grew up in the B2B side of the business. But see the passion people have for our brands is really overwhelming. And it gives you a great sense of responsibility to make sure that we're being good stewards of them. Lee Horowitz Fair enough. Well, Ariane, thank you so much for your time. Thanks so much for joining us. Thank you, everyone, for coming to the conference.