Hybe Co Ltd

KRX:352820

Earnings Call Analysis

HYBE Q3 Results: Stable Revenues and Positive Growth Outlook

HYBE reported Q3 revenue of KRW 527.8 billion, stable year-over-year. Direct artist revenue comprised KRW 323 billion, while indirect involvement, especially merchandising and content, surged by 16% and 64% respectively. The operating profit stood at KRW 0.2 billion, with margins expected to improve in 2025 due to new business models. BTS's upcoming concerts may enhance revenue further, although their contribution will likely be below 50% of total revenue. With a strategic focus on multi-label growth and Weverse platform enhancements, HYBE anticipates stronger results in Q4 and beyond.

Q3 Stability Amidst Fluctuations

In the third quarter of 2024, HYBE Holdings reported consolidated revenue of KRW 527.8 billion, showing a stable performance compared to the previous year. Despite some expected declines, notably an 18.8% drop in recorded music sales due to less album releases coinciding with the Olympic Games, the company managed to maintain overall revenue stability. This period also highlighted the continued strength of indirect involvement sales, bolstered by fan support, with merchandise and licensing contributing KRW 99.1 billion and content sales soaring by 64% to KRW 79.8 billion.

Operational Insights

The operating profit stood at KRW 0.2 billion, which highlights a 10.3% operating profit margin. However, net income was affected by non-operating losses related to equity stakes and FX impacts, resulting in a net income of only KRW 1.4 billion. The CFO noted that the fluctuations in margins are partially attributed to one-off expenses and seasonal impacts related to artist activities, leading to an expectation of improved profitability in upcoming quarters.

Artist Performances Drive Indirect Revenue

Notably, HYBE reported strong performances from groups like Enhypen and Tomorrow X Together (TXT), contributing to a remarkable increase in merchandise sales and a robust global presence. The sales from indirect artist involvement, like merchandise and licensing, were significantly enhanced by activities surrounding TXT's characters and content-driven initiatives, emphasizing the shift toward indirect revenue channels in diversifying their portfolio.

Future Expectations at HYBE

Looking ahead, the management foresees a comprehensive bounce back in Q4 with a diverse lineup of activities planned, including more artist comebacks and tours. This aligns with the anticipation surrounding BTS’s return to full group activities in 2026, projected to contribute significantly to revenue streams, although its percentage relative to total revenue may decrease due to the growth of other acts in HYBE's broadening portfolio.

Weverse Platform Expansion

The Weverse platform continues to evolve, securing an increasing monthly active user (MAU) base of approximately 9.7 million as more services and advertising models are introduced. Following the launch of a new subscription service in Q4, profitability from Weverse is expected to improve by 2025 as new digital business models unfold.

Technological Adaptations and Global Strategies

HYBE emphasizes its strategic response to evolving global market trends, notably in the realms of technology and fandom engagement. Partnerships with major platforms are highlighted, aiming to enhance the super fan business model by understanding regional preferences, particularly in North America and Latin America, showcasing an adaptability that aims to convert general listeners into superfans.

Key Takeaways for Investors

Investors should note the dual strategy HYBE is employing: a focus on organic revenue growth through their artists and digital platforms while simultaneously mitigating risks associated with dependency on BTS. With predictions for significant performance spikes post-2026 and a well-rounded portfolio, HYBE is positioning itself for sustainable growth in the global entertainment market.

Earnings Call Transcript 2024-Q3

[Hyeonjeong Lim, executive]

[Interpreted] Greetings. Thank you for joining us for HYBE's Third Quarter Earnings Call. This is Hyeonjeong, Head of the IR team. I'll be moderating today's call, which will proceed through consecutive interpretation. Today, CEO, Lee Jaesang will present Q3 business highlights and future plans; and CFO, Lee Kyung-Jun, will present the quarterly financial results followed by the Q&A session. Please note that today's earnings call is based on preliminary consolidated estimates under K-IFRS and subject to change during an external audit.

[Lee Jaesang, executive]

[Interpreted] good morning. This is Lee Jaesang, CEO of HYBE. Thank you for joining HYBE's earnings conference call. It's been already 4 years since the IPO of HYBE. The company has pursued both the organic growth based on the multi-label strategy and inorganic growth through M&As and the revenue of the company has been growing rapidly at an annual average rate of 40% for the past 4 years. Amidst the recent situation surrounding the company, hypes management, employees and artists continue to do their best and produce good results. We are committed to carrying out our business in earnest, focusing on the core values. I'd like to thank our shareholders for their continued trust and support. Let me now turn to the results for Q3.

Since completing his military duty in June, Jin of BTS has been so active that his absence was not even felt. He appeared on various entertainment shows and TV shows as well as photo shoots and advertisements for various brands. In October, Gin released the full version of Super tuna that was released back in 2021, entertaining his global fans and raising expectations for his upcoming activities. He will release its first solo album Happy on November 15 and meet with fans through a fan showcase. The prerelease track all be there has already topped the Oregon chart in Japan and [ 2Q ] chart in China and landed in the first place on the top song list of iTunes in 70 countries and regions, including Japan, Brazil and Australia. The song also entered the ninth place on the Spotify daily top song global chart, making it his high-strength solo track. In addition, J. Hope became the second BTS member to finish military service on October 17. The rest of the members will be discharged in June next year, creating much anticipation among fans as the day when they can see all 7 members is getting close.

[indiscernible] made a comeback in 6 months with the 12 mini albums spilled the fields in October. It became the double million seller on the release date and the album became the triple million seller during the first week with 3.16 million copies sold, which is the only album with this much of record released worldwide this year. The group's global popularity has been well demonstrated with the new album topping the iTunes top album chart in 18 countries, including India, the Philippines, Singapore, Thailand and Turkiye. The album was particularly loved by fans in Japan. It was ranked first on the Oregon weekly new album ranking, making the group a foreign artist with the most #1 rankings and 410,000 copies were sold in Japan during the first week, which is the highest weekly album sales as a foreign artist.

Furthermore, with the new album entering the Billboard 200 and #5 in the U.S. The group has had 6 consecutive albums included in the top 10 list of the Billboard 200, demonstrating their popularity in the U.S. Following last year, the 17th Street event was held once again this year to celebrate their comeback. Many Korean as well as foreign fans visited the street in [indiscernible] for 10 days and the 17th Airbnb event in collaboration with Airbnb was quickly sold out as nearly 40,000 fans watched to the reservation page.

Starting with the promotional events for the new album, 17 embarked on the 17 [indiscernible] World Tour, which began with the first concert at Korean Stadium with 58,000 fans. It is a large-scale tour that covers the U.S., Japan, the Philippines, Singapore, Indonesia and Thailand and will continue until early next year. The city project will also be carried out in L.A. as well as [ IT ] Osaka, Fukoku and Nagoya in Japan.

Tomorrow by together concluded [indiscernible] our successfully with the [ Encore ] concert at [ Costpodome ] on November 3, following the concerts in [ Korbia ], the U.S. and Japan, they are continuing their activities by releasing the seventh mini album, the star character -- the star chapter sanctuary yesterday on November 4. In the third quarter, Yanjing released a mixed tape [ gum ] to showcase its unique creativity. The track top the eye tunes top song chart in 32 countries and regions and ranked fourth in the billboard world digital song category for 2 consecutive weeks, demonstrating his talent as an artist with these successes. In August, TXT's official character, [ bulbatu ] was unveiled, which was created with the participation of the members. The [ bulbatu ] top of store, the [ bulbatu wadi wadi ] offered special spaces in March, featuring the character and the story with much support and interest of the fans, sales far exceeded the initial expectations. Afterwards, the pop-up stores in the U.S., Japan and China were also very successful, confirming the group's global popularity.

And [indiscernible] rose to stardom as a top-tier artist reaching a career high with their second regular album Romance Untold released in July. The albon's first week sales were up 25% compared to the previous album, selling around 2.34 million copies. The success dispelled the concerns over stagnant growth of K-pop in some markets. With the first double million seller in terms of first week sales and HYBE then entered the Billboard 200, the main billboard chart in the U.S. and #3 and stayed on the chart for 12 weeks, achieving their highest ranking to date. The group's popularity in Japan was proven with the album topping both the Oregon daily Albon banking and the weekly album ranking. And HYBE then will continue the momentum by releasing the repackage album Romance Untold Daydream on November 11. Having held the first stadium concert in Korea at [ Koyang ] stadium in October the group will start the third world tour, walk the line to meet with global fans.

[indiscernible] made a comeback on August 30 with their fourth mini album Crazy. The title track entered the Billboard Hot 100 for 2 weeks, the best result for K-pop group this year and the album top the Oregon daily Albonranking on the day of release in Japan. Following their debut bum unforgiven and their third mini album easy, this new album was the third album that surpassed a cumulative shipment of 100,000 units in Japan, thereby earning the Gold Disk certification by the Japan Record Association. The [ Serafin ] plans to release Japanese single Crazy on December 11 as a strong finish to their 2024 activities. The official character of [ FIMSClub ] was launched on October 29 which was created based on the input from the members. In special FinSclub-themed pop-up store was opened at [ coex ] for 1 week for their fans.

New genes became the first non-Jpop artist to perform at the Tokyo dome by hosting the bunnies camp 2024 Tokyo dome for 2 days in June. With How Sweet released in May and the Japanese debut elbon Supernatural released in June, 5 consecutive albums of new genes have become million sellers. In Q3, although there were no major activities like album release or concert, the group maintained consistent popularity in advertisements in on music charts. Hype will continue to do its best to support new genes for the continuous growth.

[indiscernible] [ Nextdoor ] had a career high with their third mini album 19.99 released in September, selling 760,000 copies in the first week. The group is showing a good trend in the U.S. and Japan as well. First, in Korea, the Album continues a good sales trend with the cumulative sales exceeding 1 million copies. The result indicates the growth in the number of fans generating excitement for their upcoming activities. In the U.S., the Album stayed on various Billboard charts for 4 weeks in a row while the group showed exclusive growth in Japan with the album topping the Oregon weekly album ranking, weekly combined album ranking and the monthly album ranking for September.

In their second year, [indiscernible] Nextdoor interacted with fans for the first time through a fan meeting in June, and the group plans to hold the first world to our [ Knockon ] volume on. From last year until the first half of this year, [indiscernible] Nextdoor strengthened their concert performance skills through various stage experiences in Korea, Japan and many parts of the world. By releasing 5 albums in just 1.5 years after debut, the group has carried out vigorous activities to attract fans. Starting with the concert at Inspire Arena in Inchon, the group will embark on the first overseas tour to meet with global fans through concerts in 6 locations in Japan and in Asia.

[indiscernible] created a global sensation with her debut album [ Super Real Me ] in March. In just half a year, the group made a comeback with the second mini album in October. The title track Cherish landed high on streaming charts in Korea and entered Spotify's daily top song chart in 8 countries and regions, proving their global popularity again. And their popularity in Japan was quite strong with the new Albom ranked second on the Oregon weekly album ranking the first place on the foreign album ranking and the fourth place on the digital album ranking, demonstrating their album sales power in Japan. As the 2 albums released this year received good responses from bans around the world [ ELEAD ] was able to achieve cumulative sales of 1 million copies in just 7 months before debut .

[indiscernible] is the first project for HYBE to apply the K-Pop system to the U.S. mainstream music market. The group was officially launched in August with their debut loses, which entered the Billboard 200 in the U.S. for 2 weeks in a row. Touch, one of the double title tracks is still on the Billboard Global 200 charge for 7 consecutive weeks. It is very encouraging that Spotify listeners are well distributed geographically, including the U.S., Southeast Asia, Japan and Latin America. The fact that American listeners are the largest listener group and [ Cat sizes ] music entered the billboard pop airplay for 2 weeks in a row, which is a chart that reflects airplay on major radio networks in the U.S. indicates that their music is enjoyed not only by [ Kai ] K-pop band but also general audiences in the U.S. Right after the debut album, a Netflix documentary, titled popstar Academy that show stories behind their debut was released. And [ Katsi ] appeared on a live TV show, good Morning America on ABC and just 1 month after debut. They also conducted promotional tour in the U.S. and Asia and plan to continue their activities until the end of the year. These are part of the efforts to revitalize the enthusiastic fandom culture that sort of disappeared in the U.S. after the 1990s.

Artists of HYBE America were also very active. First, Ariana Grande of SP projects has played a leading role in the musical movie Wicked soon to be released globally and the soundtrack LP will also be released, raising expectations for follow-up activities of the artist. Lil Baby of QC Music collaborated with Central C on our track band for band, which to the U.K. chart and landed on the U.S. billboard chart. JT successfully launched the first solo project and is on a tour in 20 cities with a single that is now RIAA certified gold. BML G artists have also been very active in Q3. [ Pumas Red's ] new album [ About a Woman ], topped the iTunes album chart and is still doing well on many global charts, including the Billboard 200. Going forward, in Q4, HYBE America artists are scheduled to carry out diverse activities.

Since the establishment in November last year, HYBE Latin America has been building an artist lineup by acquiring new Latin artists such as Magna and [ Chicooree ]. They're also preparing to debut a localized band, which can mark a starting point of fandom business in Latin America, where consumption of Latin genre music can be developed into a more complex culture. So we ask for your interest and support.

Now moving on to Weavers. The Wevers DM, which was launched last year, is now available not only for HYBE artists, but also other labels and artists. Following [ N team ] [ ILID ] and [ catsign ], tomorrow by together opened the DM service in September, and we expect other Korean and foreign artists to utilize the TM service going forward. We versa secured a stable MAU trend by offering services across diverse fandom activities and has introduced advertising on the platform early this year for pilot operation. And the platform will expand external ad showing. In September, we first started playing external adds on the main homepage and the Samsung Galaxy ad was played on the opening page of the app.

And video ads will be shown during live streaming sessions and VOD in the fourth quarter. In addition, we first dramatically improved the platform's usability with new UI and UX and further advance the features in October in order to enhance convenience and provide personalized services according to diverse needs and preferences of artists and their fans from around the world. Along with the new monthly subscription membership service to begin in the fourth quarter, profitability of leavers is expected to improve in 2025 through new digital business models, so we ask for your continued interest.

Now CFO Kyung-Jun will report on financial highlights.

[Kyung-Jun Lee, executive]

[Interpreted] Good morning. This is Kyung-Jun. Let me report on HYBE's consolidated financial results for Q3 2024. The consolidated Q3 revenue posted KRW 527.8 billion, a similar level year-over-year. Revenue with direct arts involvement, including recorded music sales concerts and advertisements, was KRW 323 billion, accounting for about 61% of the total revenue while revenue with indirect artists involvement, including merchandising, licensing, content and fan club sales recorded KRW 204.9 billion, taking up the remaining 39%.

In Q3, with a major international sporting event, the Olympic Games, albon releases by HYBE artists were less frequent, but with the continued growth of the sand on power of HYBE artists, revenue with indirect artist investments such as merchandise, licensing and content recorded a significant growth year-over-year, thanks to the support of our fans. Operating profit [ KRW 0.2 billion ] with the OP margin of 10.3%. Net income posted KRW 1.4 billion due to the recognition of nonoperating losses, including valuation losses on equity stakes of other companies as well as FX losses on the back of the depreciation of the U.S. dollar. Let me give you more detail by revenue category.

In Q3, of the revenue with direct artist involvement, recorded music sales were KRW 214.5 billion, down 18.8% year-over-year. As I mentioned earlier, albon releases were scheduled in a way to avoid overlap with the global sporting event of the Olympics, but we were still able to maintain a solid trend, thanks to the increase in album sales by [ Enhypen ] and [ Boy Next Door ] and strong streaming performance of BTS [ Jimin ] and [indiscernible]. Furthermore, [ Catsi ], which enabled our expansion to the pop genre, contributed to recorded music sales with powerful performance in the global streaming market since debut. In the third quarter, Concert sales were KRW 74 billion. It took the shortest amount of time for tomorrow by together as a Kapopartist to conduct the 4 done tour in Japan and other acts such as [ Nteam ], [ 17 ] conducted fan meetings contributing to concert sales. In Q4, we expect the overall growth of this revenue category as diverse artists are scheduled to come back and carry out diverse activities.

Of the revenue with indirect artist involvement in Q3, merchandise and licensing sales were KRW 99.1 million and the content sales recorded KRW 79.8 billion, up 16% and 64%, respectively. Merch and pop-up sales related to TXT's official character, [indiscernible] were very popular around the world and for March, including light contributed to the revenue. Content sales were mainly driven by the documentary Pop Star Academy that features the stories behind cat size debut and [indiscernible] movie.

Moving on to KPIs of [ reverse ]. Q3 average MAU was up Q-o-Q to approximately [ 9.7 million ] with the slowdown in orders activities in Q3, ARPPU, which measures the average monthly revenue per paying user and the total payments were down slightly quarter-over-quarter but the number of paying users and ARPPU are expected to increase in Q4 with the introduction of new services on waivers. With the addition of ad revenue, the bottom line of reverse is expected to improve going forward.

2025 will be a year on various businesses that we have been investing for several years will start to produce tangible results. We expect good earnings results from our diversified music portfolio that has been built through the multi-label strategy. Our solutions business designed to offer new and unique entertainment experiences for our fans as well as the platform game and AI business. We will continue to do our best to ensure that next year will be the starting point of a brighter future. Thank you.

[Unknown Executive]

[Interpreted] Now Q&A session will begin if you have any questions. [Operator Instructions] The first question will be provided by [ EG Kun ] from Hana Securities.

[Unknown Analyst]

[Interpreted] I'm [ Yu ] from Hana Securities. I have 1 question. You made an announcement about paid subscription or paid subscription membership service on Weavers in October, including the details of pricing and whether all labels would have to sign up to this subscription or not. So if there's anything else that you can elaborate on this membership service, please do so.

[Lee Jaesang, executive]

[Interpreted] I am Lee Jaesang, CEO. I'd like to address your question. Regarding the subscription membership service that you asked about, this subscription membership service is aimed for providing more convenient features, including the option of downloading VOD movies and videos as well as enjoying ad-free viewing -- and we will continue to add more features, including the video, live AI captioning service as well as other convenient features. And in order to offer more choices for users to be able to utilize the levers platform in a more convenient manner, we provided information to all labels that are on waivers. And -- but for all the features and functions on waivers, you can enjoy them still without having to sign up to the subscription membership.

[Unknown Executive]

[Interpreted] The following question will be presented by [indiscernible] from Daiwa Securities.

[Unknown Analyst]

[Interpreted] Related to your game business. As for the upcoming title that you're going to publish, how is it different from other MMO RPG games? And what is the time line for the launch of this title? My second question is related to the overall direction of your game business. When I look at the game portfolio that you have, it may have some differences compared to the demographics that you have for your entertainment business. So as a publisher, what is your competitive strength? And what are some of the criteria that you apply when you're sourcing titles.

[Lee Jaesang, executive]

[Interpreted] I'm CEO, Lee Jaesang. Let me answer your questions. Let me comment on your second question. regarding how we are taking an approach to secure titles and how we are operating our game publishing business. You understand that there are many excellent publishers, both in Korea and overseas, but how is hype differentiated from other publishers in the market. What I can say is that as we have much experience in conducting music business, we are able to understand the fans and how they are reacting to particular types of content. In other words, we're able to understand how the market and the users react to our offerings. And based on the analysis of their reactions, we can improve our content offerings going forward. we can apply this approach to our game publishing. And as you may know, the global trends in the gaming industry continue to change.

So now it is critical for global publishers to continue to interact with players around the world, and this is critical for the initial success of the game because it requires very intense and fast communication and interactions with the players in the early stages of the launch. So that a strong community of players can be formed. In the past, there was -- there were communities, but these were mainly for game players to communicate with one another. But now the publishers are actively engaged in these types of communications by providing updates and catching up with responses from the players.

So we would like to continue to follow this type of global trend by strengthening our communications with players from around the world. And HYBE has good ability to understand fans, and we have good communication skills to interact with users and fans. So we're going to focus on creating the core players in the beginning stage of the publication and continue to check the market responses. In other words, we are continuing to upgrade our operational capabilities.

Regarding your first question, there's a lot that I want to say. And there were media reports about the teams and who's involved in terms of architecture and what is our publishing approach. So there's a lot that was reported already in the media. But when it comes to the specific details about the project and the time line, we do have a lot of internal expectations about this project but there's only so much we can expose to the outside stakeholders. When it comes to the time line and the games and characters and development, I wish I could offer you more. But due to confidentiality, there's quite overall limitation as to how much I can share with you.

[Unknown Executive]

[Interpreted] The folowing will be presented by [indiscernible] by Hana Securities.

[Unknown Analyst]

[Interpreted] I would like to say that your recorded music revenue was pretty good despite the fewer album releases in the third quarter. I believe this is thanks to the good performance in the streaming market. So as you did in the second quarter, can you give us a breakdown between album sales and streaming revenue. And also, you mentioned about nonoperating losses, including the valuation losses and the FX losses. So can you provide us with specific numbers or amounts for both of these categories.

[Kyung-Jun Lee, executive]

[Interpreted] I am CFO Kyung-Jun. Let me answer your question. Of the recorded music sales, streaming revenue is about 1/3 or about 30% of the total recorded music sales. And as per nonoperating losses, the amount that you see for the nonoperating losses is basically everything. It includes valuation losses on equity holdings of other listed companies as well as changes to the foreign exchange rate. And as you may know, since the -- since September, we have had some changes to the valuations of equity holdings and foreign exchange, but I believe that this aspect will improve in the fourth quarter.

[Unknown Executive]

[Interpreted] We will entertain just one more question. The following question will be presented by [ Kim Jun ] from [ CLSA ].

[Unknown Analyst]

[Interpreted] My first question is centered on your expenses and the margin trend. When I look at the table and the steps I can see that there was a bigger increase in outsourcing costs compared to the increase in your revenue. This may have to do with your revenue with indirect artist involvement. But still on a Q-o-Q basis, the outsourcing fees increased by 16%. So should I understand this as a continuation of the trend? Or is it rather a one-off in its characteristic -- and I can see that there is a declining trend of your margin. And so what is your outlook for margin going forward?

The second question is regarding your sales revenue mix. when all BTS members come back and when they can start going on a tour, -- what is your expectation of the margin -- of the revenue contribution from BTS when they come back as a whole? Is it going to be more than 50% or less than 50% of the total revenue? And the third question is related to your reverse platform. Currently, Spotify and Tencent and other music companies are interested in monetizing from super fence. Do you think this is a good opportunity as you can increase partnerships -- or do you see this as a risk in your effort to expand the [ Weavers ] platform?

[Kyung-Jun Lee, executive]

[Interpreted] I'm CFO Kyung-Jun. Let me answer your first question on the increase in outsourcing fees -- this category includes IT-related fees and other commissions and fees, and there was an increase in the third quarter, but please consider this as a one-off because there was an increase in fees related to an M&A project. But this type of level will not sustain, but whether we will go back to the previous level in the quarters coming forward. And regarding the overall margin trend, you can see on year-over-year downward trend in our margin in 2024. But when you look at the figure on a quarter-over-quarter basis, you can see an improving -- and I believe this improvement will continue because in the first and the second quarter, there were some one-off expenses that were recognized. But as other artist groups are doing really well, and we see tangible results coming from the new businesses, our margin and profitability will continue to improve.

And your second question on the revenue contribution from BTS as a whole. We are currently having conversations with BTS members about activities for 2026 as a whole group. So at this point in time, we cannot make any concrete projections -- but if they come back as a whole, of course, their revenues will be significant. But at the same time, our other and other new businesses are doing really well, and they will continue to generate good revenue. So the portion of BTS in the total revenue is not going to be as high as in the past.

[Lee Jaesang, executive]

[Interpreted] I'm CEO, Lee Jaesang. Let me answer your last question. So with respect to super fan platforms, you can see that there are a number of tech giants and point players both in Korea and overseas, cooperating and forging partnerships and launching diverse services. And my conclusion is that this type of tendency and trend is favorable for levers.

There are many different differences in terms of characteristics of fans and the kinds of consumptions and contents that they prefer depending on countries. The #1 market is North America and second is Japan. And for Japan, their characteristics are quite similar to those of K-pop fans. But for U.S. and Europe, the markets are very different. Therefore, the fandom business model that we call for weavers and the extended consumption and content and product offerings are not really mature yet, and there are different characteristics by different music genres.

Right now, Spotify and Amazon Music and other super fan business platforms are growing. And I believe that this is very positive because is contributing to expanding the super fan business model and market around the world. We first is continuing to track and monitor the global players and point players and what they are doing. And we have completed the analysis of the fan behaviors and their content preferences and their preferences for the U.S. and Latin market. And these are the kinds of analysis that are needed to understand what types of contents need to be offered in what sequence that we can convert general music listener to become a superfans.

So based on the analysis, we are currently developing and listing up a list of services that can be offered for foreign artists that they can secure super fans and strengthen their fandom. So when we finish development for overseas sands and overseas artists, we will do our best to recruit overseas and foreign RS to be on River so that they can benefit from the offerings. So in that sense, the movement by the major platforms and point players is going to be quite positive because it is going to expand the market for us as well.

[Audio Gap]

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]