PagSeguro Digital Ltd
NYSE:PAGS
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PagSeguro Digital Ltd
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Good morning, everyone. And thank you for waiting. Welcome to PagSeguro’s First Quarter ’18 Results Conference Call. This event is being recorded and all participants will be in listen-only mode during the company’s presentation. After PagSeguro’s remarks there will be a question-and-answer session, at that time further instructions will be given. [Operator Instructions]
This event is also being broadcast live via webcast and maybe access to PagSeguro’s website at investors.pagseguro.com where the presentation is also available. Participants may view the slides in any order they wish. The replay will be available shortly after the event is concluded. Those following the presentation via webcast may pose their questions on PagSeguro’s website.
Before proceeding, let me mention that forward-looking statements included in this presentation are mentioned in this conference call are based on currently available information and PagSeguro’s current assumptions, expectations and projections about future events. While PagSeguro believe that their assumptions, expectations and projections are reasonable in view of currently available information. You are cautioned not to place undue reliance on these forward-looking statements.
Actual results may differ materially from those included in PagSeguro’s presentation are discussed on this conference call for a variety of reasons, including those described from the forward-looking statements and risk factors sections of PagSeguro’s registration statement on Forms S-1 and other filings with the Securities and Exchange Commission which are available on PagSeguro’s investor relations website.
Finally, I would like to remind you that during the course of this conference call the company may discuss some non-GAAP measures for market [ph] sales the foregoing non-GAAP measures and the reconciliation of this non-GAAP financial measures to the most directly comparable GAAP measures are presented in the last page of this webcast presentation.
Now, I'll turn the conference over to Mr. Ricardo Dutra. Mr. Dutra you may begin your presentation.
Hello everyone and welcome to our first quarter results conference call. Today I have here with me Eduardo Alcaro, our CFO and André Cazotto, our Head of Investor Relations. Before we go through the main operation and financial highlights, I would like to comment about our recent pricing strategy.
Last April we decided to adopt a pricing strategy to respond to competition. We have decided to reduce the price of our POS terminals and promote the seasonal campaign by offering zero credit and debit MGRs limited to new merchants and only valid during the first three months are up to 1500 of total payment volume per new merchants.
We are confident about our strategy to continue to deliver growth, with profitability, while creating a higher stickiness with our clients by offering a unique ecosystem through our digital account in a scenario where competition is getting more intense.
Being the first mover online and mobile first brings a natural advantage to PagSeguro that is difficult to replicate. We already have more than 2 million active merchants in our base
Our unique strengths includes, a strong brand, now [ph] applicable online reach through UOL, simple, affordable and transparent pricing, low cost of merchant acquisition being 100% online and not relying on banking channels or proprietary service force to distribute our product.
We operate in a massive addressable market with the ability to launch and cross-sell additional services through our digital account. That is a key piece of our long-term strategy.
PagSeguro prove that operating and winning the long tail requires an online and mobile first approach that is totally different from the traditional acquirer and business model. We are convinced that following this strategy we will deliver long-term shareholder values through an increasingly attractive and growing ecosystem.
We believe that our market is just being created and to have a long way to go. Constantly putting into practice our vision to disrupt and democratize financial services through technology and innovation. Once again, thank you all for joining us today. And let's go to the main operational metrics.
On Slide 3, we started our total payment volume that reached R$14.4 billion in the first quarter, an increase of R$8.4 billion, up 139% year-over-year. This growth is the result of a greater penetration of our ecosystem and long tail combined with new innovative products and solutions offer to our clients.
The non-GAAP net take rate excluding sales of devices ended the first quarter in 5.1%, a decline of 41 basis points year-over-year, mainly due to the mix of debit and credit. As we anticipated to investors during our IPO roadshow, we expected these rates to stabilize. In Q4 ‘17 our take rate was 5.1% and in Q1 ‘18 it remained at 5.1%.
On the chart below, we see the number of active merchants. Just to explain the criteria [ph] use internally. Active merchants are those who made at least one single transaction in the last 12 months. We ended the first quarter with 3.1 million active merchants, adding 1.4 million new merchants in one year. It means that we almost double the number of net additions in the periods compared to the same metric in Q1 ’17. Quarter-over-quarter, we added 296,000 new merchants or 8% higher comparing to the 274,000 new additions in Q1 ‘17.
Now, I do like to pass the word to our CFO, Eduardo Alcaro.
Thanks, Ricardo and good morning everyone. Before I start, I would like to mention that in Q1 2018 we had a total of R$75.5 million of extraordinary events mainly related to the IPO. Let me explain these items one by one.
First, stock based compensation expense and related employer payroll taxes in the total amount of R$210.6 million. These are expenses for equity awards and our long-term incentives plan. We exclude stock based compensation expense from our non-GAAP measures because they are non-cash expense.
The related employer payroll taxes depend on our stock price, timing and size of exercises and vesting of equity awards over which management has limited control. I would like to point out that the largest portion of these expense was recognized at the IPO with the issuance of 1.8 million shares.
Second, financial income related to foreign exchange variation gain in the amount of R$89.8 million from the conversion and remittance of U.S. dollars to Brazil from January 26 the date of the IPO financial settlement into February the 7th when we did the last remittance. We are excluding these financial income from our non-GAAP measures because it is a onetime and non-recurring income.
Third, facts related to the remittance of IPO primary proceeds, IOF tax to Brazil in the amount of R$13.1 million, we exclude these IOF tax from our non-GAAP measures because it is a onetime and non-recurring expense.
And fourth, the present value adjustment of notes receivables in instalments in the amount of R$16.8 million. As we discussed during the roadshow prior to the IPO one of the sources of cash to fund the prepayment with merchants was the discount of notes receivables with issuing banks.
After the IPO, the company stopped the discounting of notes receivables with issuing banks and repaid R$1.1 billion already discounted as of December 31, 2017. As you can see now in our cash flow statement.
In addition, in Q1 2018 we started to use the IPO proceeds to fund the prepayment feature with merchants. Since notes receivables are no longer discounted with issuing bank, the notes receivables balance increased in Q1 by R$1.4 billion and consequently the amount of present value adjustment also increased substantially as a deduction of financial income.
The present value adjustment depends on the SELIC rate which is Brazil's Treasury rate and it is not a cash outflow. The adjustment at present value was not material for the full year in 2017 with a negative net income impact of R$1.8 million. In 2018, we expect a negative net income impact of R$30 million for the full year.
And the last one, income tax on the non-GAAP adjustments in the amount of R$75.2 million. The most relevant non-GAAP adjustments is our stock based long-term incentive plan recognized as non-cash expenses in the amount of R$130.3 million and related employer payroll taxes in the amount of R$80.3 million.
Our share based long-term incentive plan was granted to our executives in July 2015 and triggered by our IPO in the end of January. The long-term plan that is in five equal annual instalments starting effectively one year after our IPO anniversary.
For more details of the foregoing non-GAAP measures and the reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures are presented in the last page in this webcast presentation.
Now on the top left of the page, our non-GAAP net revenue reached R$855 million in the first quarter, up 89% in Q1 ‘18 compared to Q1, 2017. Moving to the top right, let me talk about our main revenue streams composed by transaction services or mainly NDR [ph] collected from merchants, financial income from the prepayments and hardware sales.
In the first quarter of 2018 transaction and services represented 54%, financial income 35% and hardware sales 11% over total net revenues. You can see that the terminals sales is becoming less representatives in the mix when compared to the previous year and expected to continue to decrease in relative terms going forward. On the other hand, you can note that our revenues from transaction activities and other services grew 12 percentage points compared to Q1 2017.
On the two charts below, we present our total expense figures. I would like to point out here our lean cost structure that allows us to have a volume scalable business model.
Our non-GAAP total costs and expenses decreased 2.3 percentage points and in the first quarter at 3.8% over total TPV, related to non-GAAP admin expenses over total TPV it reached 0.3%, an improvement of 0.2 percentage points.
Since we are no longer discounting receivables with issuing banks, our financial expense should trend to zero. You will note in our cash flow that we settled this quarter in R$1.1 billion in receivables discounted with the issuing banks as of December 31, 2017. We still have R$600 million in receivables discounted with issuing banks that we will repay until the end of October with the IPO primary proceeds.
On the next slide we show our non-GAAP net income growth. In the fourth quarter we reached R$224 million, an increase of R$161 million and up 256% in Q1, 2018 compared to Q1, 2018 compared to Q1, 2017. The non-GAAP net margin reached 26%, an increase of 12 percentage points year-over-year.
Now I’d like to hand over to Ricardo, who will comment on new products recently launched.
On the next slide we have an important recognition, especially in relation to our relentless focus on user experience. Our my account app rate has reached four point eight stars on Google Play and App Store [ph] which is the highest rate for the additional accounts and payment app in Brazil. These ratings put us as the best in class app in our segment in the Brazilian industry.
On the next slide, we show you the launch of our new due payment solution. With this feature, our merchants will no longer need to cash out to pay bills. Our due payment feature is free of charge and includes payment of bank relief [ph] utilities, consumer and tax deals. The launch of this feature collaborates our cross-selling strategy through the digital account and increase the stickiness of our merchants.
On the last slide, we have our new POS terminal Moderninha Plus, it comes to replace our Moderninha Wi-Fi device and has the same price of 12 instalments of R$28.9. Besides new design, Moderninha Plus comes with improvements. The battery last repetitive twice as long as the previous version, a more resistant keyboard and a much faster processor. Moderninha Plus also has NFC which enables contactless transactions.
Now, we finish our presentation and we’ll start the Q&A session. Operator, please.
[Operator Instructions] Our first question comes from Domingos Falavigna, JPMorgan.
Thank you for taking the question. A question regard to your adjustments to earnings, thanks [indiscernible] results more clear. But one of the things that surprised us here was the [indiscernible] and I would like to know how much of that is recurring or not, so we basically look that you were over sighting and we noticed [indiscernible] out of total or [indiscernible] if I am assuming the similar cost per share, I would guess the additional 2 million of expenses – in additional 2 million expenses in 2019 an additional 2 million expenses in [Abrupt Audio] one off IPO related. So just like [Abrupt Audio] how much is IPO related and how much we should continue to see in 2019 and in 2020?
Okay. Good morning, Domingos. And thanks for your question. I think for us the reason why we excluded the long-term incentive plan is for us to be comparable to our comparables, for example [indiscernible] that were using. So our results our 100% comparable to their results.
And second to your question in terms of recurrences, when we watch the expenses right for us you should expect R$20 million net of taxes expenses in Q2, Q3 and Q4 and going forward.
Super clear. And your total maximum shares you can issue it's 3% out of the 250 million shares that you have right, so basically 3% on your total shares outstanding including their own share options, right?
Right. You're correct.
Okay. Thank you.
The next question comes from Gabrielle Dunn Obriga [ph] UBS.
Hi, everyone. Thank you for the opportunity. Since the start of the year we have been seeing a faster emergence of smaller players offering the same business model as you guys and as a result we have also seen a more aggressiveness on pricing of the POS and also of MVRs [ph]. Could you maybe elaborate if you have calculated any impacts from offering MVRs at 0% for the new merchants and also other strategies you were planning some roll out in order to face this competitive market. And I'll make a second question after that? Thank you.
Okay. Thank you Gabrielle for the question. We - as we said we adopted a new price in last April. The impact of zero MVR was linked to new customers. It is valid only during the first three months or up to R$1500 for a new merchant. So it's a very limited impact.
We've got the competition, yeah it's true the mass is becoming more competitive, despite the fact PagSeguro has IPO last January brought attention from other competitors that’s true. But the market is too very big. We estimate that the total market - the total addressable market is around 1.8 trillion [ph]. We have only 2% of this market, so there is still a lot of room to grow and we will respond to competition if necessary.
But we are well positioned. We have a very unique and a rich ecosystem. We have a strong brand. We have all the processes in place. We know how to do that. You can see our numbers. So we are confident that by following our strategy we will receive here in the future.
All right. And as for my second question, we have seen recent news articles, I am stating that we're planning on the open name [ph] in bank operation. And I just wanted to understand what is your end goal with the strategy. And moreover as well when could we begin to see banking products in your digital wallet?
This is a very common discussion at almost every fintech around the world. Yes it's true we discuss it about that, but there is nothing define, whether we launch it - last week is the due payments and it is unavoidable that at some point we need to have additional financial services, but we don't know which financial services will be and when will be. And if we need to have a banking license and things like that. So we're still pretty premature to have this kind of conversation and to give you any disclosure about that.
All right. That's very clear. Thank you.
Our next question comes from Carlos Macedo, Goldman Sachs.
Good morning, gentlemen. A couple of questions. First question, obviously with the competition intensifying with Cielo coming out with a bunch of promotions and being on the media a lot marketing expenses should go - continue to go up. Could you give us your thinking about not only the promotional side but also the marketing side of the business given that you have spent a lot and creating the PagSeguro brand and how you plan to defend it in the media [ph] and what that implies for marketing spend going forward?
Second, could you talk - I mean, the promotions that you're putting out, I know it's still very recent. You don't have a very long track record, but given promotions you've put out in the past, what kind of churns do you have on those promotions. I mean, once the three months are done do you still keep the client or is the churn high or is the fact of the client actually buying the POS term or reduce the churn. Help us think about that a bit? Thank you.
Okay. Thank you, Carlos for the question. I will start with the first one regarding Cielo. We don't believe that we compete against Cielo or any of the - other three incumbents in the market. Although we believe they – the three of them compete one against the other.
We operate in a different market. It's true and it's natural that Cielo tries to enter in this market. But as I said before we have this unique ecosystem, we have the business model that is different than them.
We are 100% aligned, 100% self-service. We have a simple pricing model that one size fits all. We don't believe that by having different pricing schemes depending on the type of cards or volumes or things like that, this is not the type of product that is more merchant are looking for.
Yeah, it's true we have some competition from them. They are trying to make some competition in this market but we don't believe that we are competing against them in our long tail market that we are creating, actually. We still have a lot of new merchants that didn’t accept cards before joining us. So it's a new market that regarding Cielo.
Regarding promotion, as you said its too early to have any analysis about that, but I would say that the churn they are seamless to what we had in the past why we - when we launched the products last year. So we don't see any transformational difference or consumer changing the way they work with us because of the promotion, so its too early but no news about that so far.
Okay, great. Just going back to the first question. So given your views on the potential competitors does that change anything in your outlook for marketing expenses. Is it still something that you plan to follow up the plan that you had before the competitive pressure started or you had to change anything in that sense?
So far it didn't change anything. As you can see in our first quarter we had higher market stands, but that's something that we have planned. Its still even with this competition from Cielo and even from other companies we had 296,000 new ads, so it’s a very great result. But going back to a question, we don't see any big change in our marketing spend so far.
Great, thank you.
Thank you.
The next question comes from Bryan Keane, Deutsche Bank.
Hi, guys just wanted to ask going back to the pricing change for new merchants, just trying to quantify the impact, maybe thinking about the loss revenue opportunity on a quarterly basis from the new pricing change. What typically was done for example this quarter, what the revenue was and then now for new merchants how much of an impact doesn't sound like it's going to be that big of an impact. But I just trying to quantify the impact of the different pricing and the change?
Hi, Bryan. Thank you for the question. We - as you said it's too early to give a number but just to give a sense, we are limiting the impact up to R$1500. So if you consider the inactive [ph] rate that we have you can have an idea how much we're investing to bring these new customers and that kind of implying in our cost position. So it's not a big number because we're limited only to new customers and up to R$1500.
So if you get the [indiscernible] that impact is pretty small when we make this calculation considering the more freestanding promotions versus the inactive rate that we are not charging at the beginning of their relationship with us.
And you guys don't believe you'll have to move this pricing over to the existing merchant base?
So far we don't have any data that shows that we to give that because again it’s a very limited value. The customers that are at work with us they see other advantage by using the ecosystem just like the prepaid card. Now they have the due payments with no charge. So it's more like a tactic to get new customers and we don't see this conflict with the customer base that we already have.
Okay, very helpful. And then my last question just thinking about the Brazilian economy and the trucking strike, can you talk about any impact you guys have seen and kind of going forward what do you think that might have on your guys results in the quarter? Thanks.
It's true that we have had some impact and we had a few days of impact, the terms of service really in fact last Thursday. But now we see that this truck is kind of getting diminishing or even getting over. So there will be a week or a little bit more few days with this impact, but it's going to be limited to this point as far as we look forward we don’t see that a big change, it's going to be limited to this period of time that we had the truck drivers strike.
Okay, great. Thanks for taking my questions.
Our next question comes from Jason Kupferberg, Bank of America Merrill Lynch.
Guys, good morning. Thanks for taking the question. So you just grew revenue 89% here in Q1. I know you're not in the habit of providing formal guidance, but you know is there anything you're seeing in the business that that would cause that kind of growth rate to significantly slow over the next couple of quarters. I mean yeah maybe you'll see a little bit of headwind in Q2 from the trucking strike, but putting that on the side is there anything that would call - cause a huge deceleration in your near term growth rates?
Good morning, Jason. We are not seeing any big moves or big changes in our - in our plan. As far as additions and regardless the truck drivers strike that will have some impact, but we are not see any major changes to our current business line. So in terms of growth, so we continue with our plans.
And just to complement what Ricardo said, looking to the future, we don't see any big mix changes, as we anticipated during the roadshow, if we look at the net take rate it's kind of flat to stable when you look Q4 in Q1. So we don't see the pressure a big mix shift change that is going to such a way change your net rate or affect net rate. So it's kind of stable so far and being flat.
Okay. Can you just give us your latest perspective on the regulatory environment? Obviously there is been some headlines here in there about possible changes in parts of the prepayment business. But if you can just give us a sense of your latest expectations there that would be helpful?
Well, first just to point out the regulation is fostering competition in Brazil. When you look at the last years we see that since 2010 new players are getting to the market and the regulation is trying to force to the competition. Regarding the prepayment, you're talking about the payment with interest I guess, the instalment with interest I guess.
Yes.
This is a product that already exists. Consumers can use it, but it doesn't get any traction because at the end of the day first, the seller, the merchant needs to offer and then the consumer needs to accept to pay interest in purchase. And we know that in the Brazilian culture for the last 24 years or more people get to use to buy with instalments and no interest. So we don't think there's going to be big change regarding this topic and we don't see any other sign from the regulator that there's going to be a big change in the instalment we entered.
Okay. Thank you for the commentary.
Thank you.
The next question comes from James Friedman, SIG.
Hi. Thank you. Its Jamie at Susquehanna. Ricardo with regard to your comments about the trajectory of the take rates and the slides that you have, slide three, I was just wondering what do you contemplate for the debit credit mix over time and the impact of that to the take rate?
Although we have only 2% to 3% of the market spend the way look, we already have a mix that is similar to the industry around 60% to credit, 40% debit. And that's the mix that we had in the second half last year and the same mix that we had in the first quarter this year. So that's why our net rate is being flat because the mix between debits and credits are stable and reflects the industry.
Okay. And then with your prepared remarks you mentioned about the free cash flow impact from replacing the issuer receivables, you are going kind of quick there. But I think that you had suggested that there's still more to do. So if you could give us an update on that or revisit what you said replacing the issue you know, the bank the issuing bank receivable?
Sure. When you look in our cash flow, you will see a line there showing a R$1.1 million. So if you go to the change in the receivables subject to early payment that means that is the activity that we do with issuing banks, you will see that we repaid R$137 [ph] billion in Q1. At the end adding at the year – at the end of December we had about R$1.7 billion anticipated and discounted with the issuing back. So that means that in Q2 and Q3 we still have R$600 million more to settle with the issuing banks.
Got it. Thank you very much.
The next question comes from Lucas Lopes, Credit Suisse.
Good morning. I have two questions. The first one in regards to Moderninha Plus is the supply of [indiscernible] and do you have an exclusive agreement with the supplier and also in this regard to work for other hardware suppliers such as [indiscernible] remain there your sole provider.
And shall ask a second question regards to accounting [ph] the company books as revenues the gross MDR is that bit net MDR . I understand the rationale of having a similar accounting then your peers such as PayPal. But I mean that generates affects and efficiency as you end up paying more tax on sales compared to the option off reporting than that MDR as your top line, do you consider to change that to have a more optimal tax base for VAT taxes?
Hi, Lucas. This is Ricardo. Thank you for the question. I am going to take the first one and regarding the tax question Eduardo Alcaro is going to answer later on. Yes the Moderninha Plus is manufactured by Fax [ph]. We don't have an exclusive agreement with them, and the same way that they don't have with us. So we are very often looking for new hardware manufacturers such as [indiscernible] you mentioned. But at that point we decide to keep working with Fax. But you are evaluating new models from other suppliers. It depends on the features and the price. It's not an easy decision but we are always evaluating new hardware supplies.
On the question about the sales taxes base in [indiscernible] what happens is at the same time that we have deficit on the sales. We also have a credit on the end of the interchange and all the expenses that we have for [indiscernible] fees. So at the end of the day the impact is basically the same if we were recognizing the net revenue as net. because again we use the expenses as a tax credit as well.
Thanks for that. Very interesting.
The next question comes from Craig Maurer, Autonomous Research.
Hi. Good morning. Thanks for taking my question. In the release you disclosed that the IFRS tax rate came up because of some changes in the rules. If you take that out and you're looking at net take rate it actually looks like net take rate was almost flat. Could you comment there if I'm thinking about this correctly?
Just talk about IFRS, with the review of the law, we are currently judicially depositing the full IFRS tax as it were due to the San Paulo [ph] municipality, it's about 2% and provisioning the difference according to the average tax rate charges by other municipalities which is around 4%. Our preliminary calculations indicate an impact of less than 1% of the total 2018 net income.
Right. But there was a year-on-year change that will carry forward? So there is a onetime suppression of what you could call the net take rate if you're just looking at net transaction and services revenue Ogar [ph] TPV?
Yeah. Going forward we look at that rate at being stable throughout the year.
Okay, okay. Thank you. Just with all the discussion of competition it just bears pointing out that that was stable when you back that out. Okay. Thanks.
Thank you.
The next question comes from Eduardo Rosman, Banco BTG Pactual.
Hi, guys. Good morning. My question is on the new – on new products to clients in the [indiscernible] system. Interesting to see that you're now offered a new payment. So I was wondering what else you believe you need to start offering the short term in terms of new products, do you have anything in the pipeline?
And moving to still on these new products you know when do you think you know you might start granting new loans, real loans, not just big payment. Is this something that you plan to do in the short term, how do you plan to buy a bank, open a bank, so if you can give us a little bit more color on that I would appreciate? Thanks.
Thank you Eduardo for the question. As I said before we did the discussion the we had very often here regarding new financial services even this financial services will require that we have a banking license. How is going to be that - in terms of its structure taxes and so on. At this point we don't have any - anything to find it about that. We are evaluating very carefully. It's clear that we have this ecosystem with three million merchants that we could offer more services to them.
The first ones is the due [ph] payment. We have some others in pipeline but they are not transformational when [indiscernible] next two weeks but not in transformational at this point. But regarding the financial services the law went so on. That's something that we are discussing. We don't have anything defined that I could see you - when we are [indiscernible] going to be done. But we are discussing that very often.
Okay. Thank you very much.
The next question comes from Felipe Salomao, Citibank.
Hi, everyone. Thanks for taking my question. Just one question about topline and volume growth, the TTV grew sequentially 10% but the operational topline which includes POS sales revenues, transaction revenues and the detainment of receivables contracted 2% sequentially. So what explains that that difference between the TPV growth and the operational revenues growth/
Hi, Felipe. What do we see, first, we have obviously in Q1 is the weakest quarter of the year. We have vacations in Brazil and we are also comparing against Q4 which is the strongest year in terms of in terms of CPC [ph] volumes and revenues.
About your question when you look at the combined in those three lines, one thing that you need to consider in our calculation is that hardware sales, our hardware sales are down 20% when compared to last year because of the changes in the mix and we continue to add new merchants to the base. So at the end of the day I mean, you need to consider in our analysis day hardware sales and also you need to consider that Q4 is the strongest quarter of the year.
Okay. Thank you very much.
[Operator Instructions] And the last question comes from Domingos Falavigna, JPMorgan.
Thank you for taking the second question. My question is just regarding like when you guys out the promotion like the one we're seeing now, we have [indiscernible]. How much of the new MSM is very, very small but I'm just curious and if care to share? How much of your sales or existing tax clients feel like people changing just to benefit from the lower MDR or its like it's a 100% basically new calculations?
Domingos I've got to be - to get the promotion or to get this offer you need to buy a new device. So you should make the calculation regarding the benefits that we’re going to have but not paying MDRs up to 1500 versus the price of the device is almost the same price or even the device a little bit expensive depending on the device that you got, so that's not something that you are kind of cannibalizing the people buying device just to get the benefit of these promotions.
That make sense. Thank you.
Thank you.
This concludes today's question-and-answer session. I would like to invite Mr. Ricardo Dutra to proceed with his closing statements. Please go ahead sir.
We do like to thank you all for the time you spent with our management team. We would like to reiterate our commitment and focus on delivering solid results aligned with the governments and best market price. See you all next conference call. Thank you very much.
That does conclude the PagSeguro’s audio conference for today. Thank you very much for your participation. Have a good day. And thank you for using chorus call.