Groupon, Inc. (GRPN) Q3 2022 Earnings Report, Transcript and Summary

Good day, everyone, and welcome to Groupon's Third Quarter 2022 Financial Results Conference Call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the Company's formal remarks. [Operator Instructions] And just a reminder, today's call is being recorded. And now at this time for opening remarks, I would like to turn the call over to the Chief Communications Officer, Jennifer Beugelmans. Please go ahead, Ms. Beugelmans.

Hello, and welcome to Groupon's third quarter 2022 financial results conference call. On the call today are CEO, Kedar Deshpande; and CFO, Damien Schmitz. The following discussion and responses to your questions reflect management's views as of today, November 7, 2022 only and will include forward-looking statements. Actual results may differ materially from those expressed or implied in our forward-looking statements. Additional information about risks and other factors that could potentially impact our financial results is included in our earnings press release and in our filings with the SEC, including our annual report on Form 10-K. We encourage investors to use our Investor Relations website at investor.groupon.com as a way of easily finding information about the Company. Groupon promptly makes available on this website the reports that the Company files or furnishes with the SEC, corporate governance information and select press releases and social media postings. On the call today, we will also discuss the following non-GAAP financial measures, adjusted EBITDA, adjusted EBITDA margin, free cash flow and FX-neutral results. In our press release and our filings with the SEC, each of which is posted on our Investor Relations website, you will find additional disclosures regarding the non-GAAP measures, including reconciliations of these measures to the most comparable measures under U.S. GAAP. Unless otherwise noted, all comparisons to 2019 are provided on an FX mutual basis. And with that, I'm happy to turn the call over to Kedar.

Hello, and thanks for joining us. Throughout this past year, we have talked a lot about the fundamentals of our turnaround strategy, reduce our cost structure, and at the same time, improve our core marketplace experience. Let's talk about the progress we have made on both fronts. We are significantly streamlining our cost structure and allowing it to grow our business is today, we are well on the way to achieve our Phase 1 goal to take out 150 million of annual costs and expect to hit this run rate by the end of 2023. We complete a big majority of headcount actions only in the fourth quarter, and expect to begin, to realize the benefits of all right sizing starting in 2023. Our new cost structure should provide us with significant operating leverage and ability to sustainably generate positive free cash flow as we execute on our turnaround strategy. Moving forward, we will continue to look for opportunities to optimize our cost footprint to ensure it remains aligned with current business while still giving us room to grow. And for 2023, we have a goal to identify an additional $50 million of savings and related cost actions by the end of the year. We are also executing on initiatives to improve our core marketplace. And during third quarter, our local category was stable, with global local billings that came in at 49% of 2019. This was in line with our expectation and consistent with our performance levels over the last six months. We are orienting our marketplace around solving everyday customer problems. And to do this, we need to deliver on two strategic priorities; improve our customer experience to ensure customer interactions on our marketplace are relevant, credible and actionable every time they want to come to our marketplace; and improve inventory density our marketplace to ensure, we have the right breadth and depth of inventory to satisfy customer intent. I believe that, if we get customer experience right and if we get our inventory density right, it will help us meet our customers' needs every time they come to our marketplace. Doing this will unlock a customer's willingness to buy local experiences and services from us far more frequently. So going forward, improving local purchase frequency is the most important metric and will be the key major of how well, we are executing our strategy. We are going to be relentless in driving this metric higher. Today, we are seeing customers buy just two to three units of inventory from us per year and we are only retaining 30% of these customers on average for more than one year. These metrics are disappointing, given we are a horizontal marketplace. I believe that, this is because we are not creating the reason for customers to engage with us more frequently. And so, we have created a roadmap of experiments and initiatives with the goal of driving purchase frequency higher. These include; improving search and relevance, enhancing the way we work with our merchant partners, creating new customer incentives and testing new marketing channels and strategies to drive demand. So far, this year, we made a lot of progress on initiatives aimed at building trust with our customers and we expect this progress to help support healthier customer retention going forward. As a marketplace, we have to create an environment that all, but ensures customers will have positive experience every time they come to Groupon. We made meaningful progress here this year. First, we make sure that when customers come to our marketplace and search up a deal on something, they can trust that we offer the best deal. We put a process in place in North America to improve our ability to monitor pricing to make sure customers can't find a better deal anywhere else. Second, customers need to trust that whenever they purchase on Groupon, they will be able to use and that they will have a great experience. This is nonnegotiable for us and we implemented a process to remove high net binding merchants from our platform and proactively identify and help those merchants with degrading refund trends. Trust is one of the foundational elements for the Groupon customer experience we want to deliver. We are also focused on unleashing the power of horizontal marketplace by experimenting with pricing and promotions to encourage your customers to make more purchases across more of our verticals more frequently. We are testing and learning in a number of areas that will give us insights into how we can improve retention of both our existing customers and our new customers. Let me walk you two of these experiments. Last quarter, I told you about a significant test, we were running to encourage cross vertical purchases. The goal of the test was to get customers to browse a specific set of inventory in our catalog, instead of coming to our marketplace for one specific deal. We believe that by surfacing new, specific inventory vertical to our existing customer, making their marketplace experience more interesting, we can improve customer retention. So, the test offers incentives to customers who have purchased inventory from our dining vertical to make a subsequent purchase within our beauty and wellness vertical and vice versa. During the test, we increase the cross vertical purchasers 150% versus a control group. Based on this success, we began scaling this enchanting to our global marketplace in the third quarter. This initiative is currently scaled in 11 countries, and we expect to ramp it up fully in North America before the end of the year. We are also testing ways to leverage Groupon incentives as a means to get new customers to browse and engage with our full catalog of inventory. In our initial test, we are giving Groupon Bucks to customers when they purchase our full price market rate inventory. Our hypothesis is that by providing this additional value via bucks, G-Bucks, it will incentivize customers to purchase our full price inventory and give them back to Groupon later to use their G-Bucks and make another purchase. Our initial test results have been promising. We have seen anywhere from 6% to 22% lift in conversion depending on the test. We are also seeing repeat purchases. I have to say, it's still very early, and we are only testing our Atlanta market. But we are excited about the potential of this initiative to improve conversion and purchase frequency. We will continue testing, learning and tracking our existing test cohorts before scaling in North America and international markets. Another way to incentivize customers is to meet customers where they are by making it easier for them to purchase and book their services and experiences with merchants they know and love. We had a great win here recently with a large theme park, Universal Studios Hollywood. Our team was able to create a bespoke integration that transition this merchant from physical voucher based experience to an online bookable experience that provides customers with a date based pricing and convenient streamlined ticketing experience. This update means that we can now provide our customers with a more seamless search and purchase and redemption journey. In addition to improving trust and driving and unleashing the power of our horizontal marketplace like other marketplaces out there, we are continuing looking at ways to improve search and relevance. We recently began testing a new ranking algorithm in some of our international markets and have seen early but promising results. In our tests, we are adding an auto complete function that features specific deal offerings in the search drop down menu. So for example, when a customer begins typing in sushi, instead of providing matching recommended search terms, like sushi making class or sushi buffet, the search bar will populate with local and relevant sushi dish available on our marketplace. This allows them to click directly onto a deep age, keeping the search landing page quality together with the goal of driving higher conversion. We are also testing ways to optimize our search algorithms and better showcase personalized de-recommendations throughout the customer journey. For example, we are testing the impact of including personalized to be at the bottom of the page and during checkout. While we just started testing in October, in the poor countries where we are testing these combined improvements, we are seeing 10% higher revenue per customer. We plan to expand these days to North America in fourth quarter. Now let's get into how we are improving our inventory density. We need to have inventory that is engaging and meets the needs of customers every single time they come to our marketplace. This is critical to our success. This is how we satisfy intent. This is how we create more reasons for our customers to buy from Groupon again and again. To do this, we are working on few priorities. At the highest level, we are working to make sure we have the right breadth and depth of local experiences and services. Inventory in any given geography, delivering on this call, all the time will tell customers that they can come to Groupon first when they're looking for local. They can trust that we will have what they need. So how are we working on this today, in two ways; first, we have restructured our North American sales force to better align with our inventory density polls; second, we are relying on resources like margin marketing, self service, and calling offers to help us scale. Regarding our sales force, we now have a smaller, more focused team. We are doing a better job of using our deep treasure trove of data to inform our supply acquisition efforts and identifying inventory that will create a better customer experience. Our supply acquisition strategy is now focused on acquiring and retaining inventory in geographies and verticals that we believe will drive incremental consumer demand. This is the first and most important criteria. What does this mean in practice? This means that, our sales team is incentivized to acquire merchants' inventory that customers want to buy in target geographies, where we do not have adequate coverage. Instead of eight massage in any given geography, let's say, we would direct our team to bring on the first or second new salon, et cetera. Our North America sales team alone cannot help us to scale our inventory strategy, so we must do a better job of leveraging scalable resources to take us the rest of the day and we are. We are leaning into three of those resources today; merchant marketing, self-service and CLO. First, we are stamping our efforts to leverage merchant marketing to help to acquire and deepen relationships with merchant partners. Merchant marketing will support our supply acquisition strategy in three key ways; one, by using marketing resources to target specific inventory verticals and geographies, where we have gaps; second, by helping to improve the perception of Groupon brand before our sales team reaches out; and third, managing leads more effectively and channeling merchants to sell our self-service depending on their needs and potential. After merchant partners join our marketplace, merchant marketing will focus on deepening relationships with our merchants by driving self-service awareness as a means of quickly and effectively managing campaigns and cross-selling into new deal types or products. With self-service, North America continues to leverage improved platform to help our merchant partners to launch and ease their deals and also to bring new merchant partners to our marketplace. In fact, September, over 75% of our new inventory on boarded through self-service. These two resources are allowing us to figure out new better ways to supplement the reach of our sales team as they focus on acquiring and retaining right merchant partners, and helping them grow on Groupon marketplace. Rounding out the trio of scalable resources is card-linked offers or CLO. As a reminder, CLOs are digital cash back rewards that consumers automatically receive when they opt to link their debit cards or credit cards to Groupon. Our hypothesis is that, we can seamlessly and quickly bring on these specific types of inventory through partnership and technology to help; A to fill inventory gaps; B, to showcase inventory like dining options that consumers are using more frequently. Having more of this type of inventory on our platform should drive traffic, engagement and purchase frequency. We recently completed our CLO integration, which more than tripled our North America dining inventory. Since the beginning of the launch in September, we have already seen signs of success. In dining inventory search conversion increased by more than 15% since we launched CLO, and we hit our target redemption rate. This means that more customers are searching for and discovering great quality local dining margins, claiming CLO offers and redeeming them by making purchases at local merchants. While these early results are promising, we still have more work to do to really move the needle. First, we need to make this inventory easier for customers to find by improving our search and relevance. And second, we need to improve the user experience. So, it is easier for customers to engage with this type of inventory. And if we get this right, I believe this initiative can be an important driver to improving customer engagement and purchase frequency. We have launched a number of initiatives in Atlanta, which we are using as a test case to see how we can supercharge results and get customers to buy more frequently. Ultimately, our goal in Atlanta is to keep customers engaged on our platform and improve our customer purchase frequency by 20%. In early results, we have seen Atlanta customers come back more frequently in the last 45 days compared with customers in other U.S. cities. In terms of what is working, we have seen our coupon customer incentive initiatives deliver a left in repeat purchase rates. But again, it's still early, and we have some more work to do to optimize other initiatives in Atlanta, such as how we surface our CLO inventory to customers. We expect to make further progress here as we continue to test and iterate. And I look forward to updating you on our progress. As we continue to make progress improving our core business marketing will play a key role in retaining and bringing new customers to our platform. During the third quarter, we significantly increase our investment in SEM and display marketing. And we are confident that these were sound investments that will deliver incremental ROI over time. That said, we have not yet optimized our strategy to use mid funnel marketing investments to maximize our in period returns in our performance marketing channels. So in the fourth quarter, we are reallocating some of performance marketing dollars into mid funnel marketing campaigns to see if we can optimize our marketing spend. We started testing in October with the launch of second annual Groupon day event which feature big savings or local experiences and services, and one of a kind deals. The goal of this campaign was to grab customer's attention and get in early on holiday purchasing patterns. So what did we learn from this campaign, we learn that we can drive more consumers to our site and improve billings. While we did not quite reach the goal is set for the campaign, we did drive traffic up nearly 5% and conversion nearly 7 basis points during the ADP. Also we are sowing the seeds with the future customers. We were able to dry increase that download email subscribers and SMS subscribers. I'm excited about the progress we have made so far, but we still have more work to do. Over the next few quarters, we are continuing to test, learn and recalibrate our marketing investment so that we can improve our brand perception. Put Groupon in the consideration set for both customers and merchants, and make our investment in performance marketing delivers better returns. Finally, on the inventory front, we are on track to launch a standalone beauty experience platform to better serve high intent customers looking to explore and find trusted providers for high end minimally invasive beauty treatments. A test of this concept is planned for launch before the end of 2022 in the Charleston market. We are pleased to share that we lead our first ever ESG report this October, which outlines how we are working to create value for and uplift all our stakeholders, including our employees, our customers, our merchant partners, and the communities where we operate. This report helps us paint the picture of the foundation. We have established for ESG at Groupon. What we have accomplished to date and where we can go. You can find the report on our corporate website and I encourage you to read it when you have a chance. Before I turn it over to Damien, I want to congratulate him on being named permanent CFO. I have been impressed with Damien's extensive experience and leadership since joining Groupon, and I'm excited for him to continue to lead our finance and accounting organization. With that, I will turn it over to Damien to walk you through our Q3 results.

Thanks, Kedar I'm really pleased to step into this role on a permanent basis. Thank you as well to everyone who is joining us today. I'll use my time today to provide further insights into our third quarter operating financial results and factors to consider for the fourth quarter. In addition to my prepared remarks, I encourage you to review our slides, press release and 10-Q, which contain more detail on our Q3 results. Taking a step back, before we go into our third quarter financial results, our performance this quarter underscored the stability we are seeing within our core local category. While we haven't seen the impact yet from the initiatives we've launched to support our strategic priorities, we are taking steps to drive engagement on the platform and unlock growth. So let's jump into our consolidated third quarter results. We delivered 434 million of gross billings, 144 million of revenue, 126 million of gross profit, negative 9 million of adjusted EBITDA. We ended the quarter with 308 million in cash, including 110 million drawn on the revolver, and we had approximately 20 million active customers worldwide. Turning to our local category, consolidated local billings were at 49% of 2019 levels. This compares with 52% of 2019 during the second quarter. In October, we begin to pick up some momentum and have seen North America local billings recovered to 52% of 2019 levels. Within our North America customer base, we had 9.9 million active local customers in the third quarter, down 9% year-over-year. And within our international markets, we had 5 million active local customers in the third quarter, which represented growth of 22% year-over-year. Moving to our goods category. In the third quarter, billings were 54 million and in line with our expectations. As a reminder, we completed the international goods transition to a third-party marketplace model in the fourth quarter of 2021, which means we recognize goods revenue on a net basis. Turning to operating expenses. SG&A was $119 million and included higher-than-expected expenses related to our migration to the cloud. We still expect to reduce SG&A by at least $10 million in the second half of 2022 versus the first half of 2022. Despite higher cloud costs and the timing of benefits related to our cost actions, we are committed to substantially reducing our cloud costs overtime, which will be complemented by lower payroll expenses, resulting from the cost actions we took this year. To-date, we incurred $6 million in one-time pretax charges related to the cost actions we announced last quarter. Marketing expense for the third quarter was $38 million or 30% of gross profit. As we continue to deliver improvements to our fundamental marketplace experience, we expect to continue calibrating our marketing investment to drive customer engagement and purchase frequency. As I mentioned earlier, we ended the quarter with a cash balance of $308 million, which includes $110 million drawn on our revolver. During the quarter, we successfully amended our revolving credit facility, giving us full access to $150 million borrowing capacity. We also remain on-track to take $150 million in cost out of our business. Groupon continues to hold a 2.29% equity stake and the privately-held global payments providers SumUp. As a reminder, we reflect the value of this stake as well as other minority investments on our balance sheet. Catering value for this investment is approximately $120 million. While there is no public market for SumUp securities at this time, if an opportunity arises to monetize this asset, we would consider this path forward. Given our current equity market valuation, our SumUp stake and our operating plan focused on unlocking both top-line growth and expense savings. We do not believe that our public valuation reflects our business opportunity. Between our assets and the lean cost structure we are creating, we believe we have the resources we need to execute our turnaround strategy and deliver free cash flow consistently. To help with your models, we have included a slide in our earnings presentation to show out savings from our cost program expected to translate to our P&L over the next several quarters. The highlights haven't changed from what we disclosed in the second quarter. In addition, specific to the fourth quarter, here are some key factors to consider. So far in Q4, our trends are improving or holding steady. October North America local bookings are estimated to be approximately 52% of 2019 levels or roughly 300 basis points above 3Q. International local billings in October are estimated to be in line with 3Q levels or approximately 50% of 2019 on an FX neutral basis. And consolidated local billings for the month are estimated to be 51% of 2019 on an FX neutral basis. As Kedar mentioned, we plan to reallocate some marketing spend in mid funnel channels and we will look to continue to invest in marketing overall, if we see opportunities to drive attractive returns. We expect fourth quarter SG&A to be relatively in line with the third quarter and we expect to generate free cash flow in the fourth quarter. With that, I'll turn it back over to Kedar for a few final prepared comments.

Thanks, Damien. Our team has been hard at work, executing on our cost action plan and on initiatives to improve our marketplace. And over the past few months, we have taken important steps forward. We are executing on a multi phase cost saving plan and expect to achieve 150 million in run rate savings by the end of 2023. We made progress reorienting our marketplace around solving everyday customer problems. We have a number of initiatives in flight is that delivering a better customer experience, and improving our inventory density so that we can better satisfy customer intent and drive purchasing higher. We have a plan to launch our new beauty experience platform in Charleston market by the end of the year. And now with our improved marketplace, we have begun testing into marketing to help us by customer engagement and purchase frequency. While this progress is not yet reflected in our financial results this quarter, we have begun to see reshoots of progress. And I'm confident that there are brighter days ahead for Groupon. Based on this, we are reiterating our point policy goals to generate 100 million in annual free cash flow and deliver a 15% to 20% adjusted EBITDA margin. All of this word should position us to begin capturing new growth opportunities as we exit 2022 and to do so, profitably in a variety of economic cycles. With that, I will turn it over to the operator for your questions.

Thank you, Mr. Deshpande. [Operator Instructions] And we'll take our first question this afternoon from Trevor Young of Barclays.

First question, on the 23 guide of the 15% to 20% EBITDA margin and 100 million free cash flow. It looks like the underlying assumption is now local billings to be around 60% of 2019 levels. That assumes a pretty healthy ramp versus as you pointed out Kedar kind of treading water around that 50%-ish level. Can you help us understand what's embedded in your framework there in terms of like macro recovery versus inventory ramp or versus stabilizing, or even growing the local customer count versus the current run rate versus purchase frequency? Just help us understand some of the puts and takes that inform that view of getting to that 60% threshold?

Thank you, Trevor. Damien's here. You're right that in our 2023 numbers sets assuming higher local billings around 60% of 2019 levels. So you heard from Kedar's remarks today around how we've improved a number of the fundamentals of the marketplace and are seeing some degree of stability. A lot of the initiatives he touched on, really in the early stages and hadn't fully manifest into the P&L to enhance the core marketplace experience, whether that's adding inventory and putting a CX, search relevance, Groupon incentives, and calibrating our marketing investment. And so when you think about where we're at today, to where we need to go, is really around driving purchase frequency, and we can get to those numbers that we've cited on our existing customer base with just a little bit more purchase frequency. So, that's really what's underlying the 2023 number set.

And then just by extension, we're trending around this 50%-ish level versus 2019, and I think you commented that in North America here in October, we're picking up a little bit. Can you talk through what the cadence was, one, throughout 3Q, and then two, what's kind of informing that uptick here so far in 4Q?

So Damian, here again, and let me unpack and reconcile a little bit around the third quarter for you. So we did say, we see we're seeing stability in the little category in both North American International for small little additional color really went looking at all the various puts and takes within the quarter operationally. There were a few smaller headwinds, namely a timing shift, or one of our major retailers, Hurricane Ian at the end of the quarter, and some other miscellaneous items. So, net-net normalized trends are relatively studies. So and that's why we were encouraged to give the October number for North America as well. And those few points of tick that got a really broad base, it's not one vertical versus the other, we're really kind of seeing that list across the board.

Got it. So sounds a little bit more broad based but that makes sense. Last one, Kedar just on the new beauty marketplace, just shared a little bit of color there on timing by year-end. Any details you can share on branding? And then I think you mentioned trying it out in Charleston first, any color on why that market versus other potential, geographic markets? And then lastly, is there any embedded contribution in that 60% of 2019 level threshold for next year?

Thanks for the question Trevor. I think the geographical market or what we are trying to do with, particularly in the beauty. Charleston area represents one of those ideal demographics for us, in terms of the customer composition, that they use these particular services, we have seen that particular behavior in the past. But stepping back, this particular beauty offering is mostly to make sure that the customer starts with customer problem and trust first, as opposed to starting with a price. And I think that's one of the reasons we are starting to make sure that we get the first and foremost customer problems, right, we be able to establish this trust. And then from there, if we believe that we have solved the customer problem, so hey, how do I find the trusted provider, because it's not five star reviews, a three star reviews, or it's not some text reviews, you actually want to go to the problem and somebody actually verifying that for you how they went through this particular process in a different i.e. video or imaging format. That's what we are trying to test it out. That's what we are trying to launch it out in the Charleston market. As far as the point for increased concern, we are not considering the recovery percentages, as part of this political initiative is not going to materially impact that 60% recovery.

[Operator Instructions] We'll take our next question now from Eric Sheridan of Goldman Sachs.

Thanks so much for taking the questions. Maybe two if I can. Can you give us a little bit of color, what you're continuing to monitor with respect to the Atlanta test and how elements of that might fit into growth versus rationalizing for costs looking forward to next year? Thanks.

So at last is what we're trying to do in Atlanta is specifically focused on two aspects. We are trying to make sure that we can sell the inventory where customers come to Groupon platform and they are like, they -- as you see, in some of our numbers, you have seen us talk about one and the customers are coming in, they go for a specific deal and then they don't come back to Groupon platform as such. To address the specific problem, we have this incentive called G-Bucks, which is launched, where we give an incentive to customers, they come back, they browse our catalog, understand better understanding of what Groupon has to offer. And then in parallel to that, we are also trying to make sure that, we have the better search experience, we have the better overall inventory experience by having the everyday inventory of them in terms of CLO. These particular inventory compositions give us the confidence that, customers are finding our platform much more useful than they have seen in the past. And so, we are monitoring Atlanta cohort of the customers with, what we call the control cohorts of Dallas and Houston and few other cities to make sure that, the retention on this particular cohort is actually a growing retention. And we have seen that particular trend. It's not up to the level that we would like it to be, but it's much bigger than our control cohorts. And so, just to summarize what we are doing here and what we are monitoring, better inventory density, with the better incentive structure that aligns with customers coming back and improving our purchase sequencing in that specific market, that's what we are very focused on in Atlanta.

And Mr. Sheridan, did you have anything further?

If I can take an opportunity, I'd love to ask maybe just one. You talked a little bit realigning marketing towards the middle of the funnel? How should we be thinking about that in terms of both the pace of marketing dollars in the next year and some of what you need to do to realign those dollars with the way you want to be in the purchasing funnel? Thanks.

Yes. So, I'm going to use this opportunity to give you my part, which I have in actually trying to get across in our presentations, and so it's again reiterating some of this particular project. So look at the beginning of the year, when I started as CEO, one of the things we did is, we stepped -- reduced our marketing spend, performance marketing spend. And the reason we reduced our performance marketing spend was, because our customer experience was not so great. There are a lot of refunds. There are a lot of customer contact challenges. And so by reducing, we focused in Q2 on improving those operational elements. In Q3, we leaned into performance marketing and we believe that, once we fix all these particular challenges, which is now we have a systematic mechanism for refunds. We have reduced, hit some of the merchants out of the platform, actually made the behavior better by improving and working with a lot of merchants, partners. And so, we have now a much better, healthier customer experience. So, we will lean into Q3 on performance marketing. Some of that performance marketing spend is coming back later down the line. But as we are launching this particular experiment to increase the purchase frequency, and we are trying to make sure that, we have this inventory density with every day inventory in terms of dining or whether it's inventory that is in the beauty marketplace. We are creating this particular slide is that customers can now engage with Groupon much better with the bugs and all these incentives. So marketing is just a part of that experiment where we are trying to say mid funnel span, we are trying to optimize that. But as the core retention improves, we will be able to spend more and more on the specific part of the marketing which is acquiring the customers more as opposed to trying to get them to retain. And that's why we are trying to make sure that the marketing spend is much more focus to all these optimization as opposed to only in the performance marketing.

[Operator Instructions] And it appears we have no further questions this afternoon. So that will conclude our call. Ladies and gentlemen, I'd like to thank you all so much for joining the Groupon's third quarter of 2022 financial results call. Again, thank you so much for joining us, and we wish you all a great remainder of your day.