Storytel AB (publ)

STO:STORY B

Earnings Call Transcript 2021-Q2

[Jonas Tellander, Founder, President, CEO & Director]

Hello and welcome to Storytel's Quarterly Report Webcast for the Quarter Q2 2021. With me, I have our Storytel's CFO, Sofie Zettergren; and our Chief Commercial Officer, Ingrid Bojner; and my name is Jonas Tellander, CEO and Co-founder of Storytel.So first of all, as you may have seen before -- the click-it doesn't work. So anyway, this morning we released the Q2 report. And what -- okay, what Storytel is about is to make the world a more creative and empathetic place with great stories to be shared and enjoyed by anyone, anytime, anywhere. And we are totally committed to this mission and we'll keep living this mission ambition for -- until the end of times basically because we think that stories should be heard, listened to and should be told, and is a universal need that we are here to meet.Looking at the hard numbers. The subscriber growth year-on-year is 29% in Q2 and the revenue growth is 19% in Q2, 22% with constant exchange rates as the Swedish Krona has been very strong lately.Some highlights from the report, which we have also released earlier some of this. So streaming sales up 22%. As I said, net turnover, including our books businesses, so we have book publishing businesses in Sweden, Denmark and Finland, up to SEK 641 million from SEK 554 million in the year ago quarter 2.We had an annual Shareholders meeting on May 4. We signed an agreement to acquire the Finnish Publishing House Aula & Company. And we also closed the transaction with acquiring Lind & Company on April 1. And then we entered into a partnership where we announced that we will enter in partnership on making Storytel's catalog available on Spotify for Storytel subscribers. So that's something we hope to release before the end of the year, together with Spotify.So looking at the net add subscribers and looking at the forecast we just gave. Basically, if you look at the year-on-year net -- cumulative net adds, starting on January 1 and ending December 31 each year. You can see that the net adds have been continuously increasing year-by-year from 2017 to 2018, to 2019 to 2020. And although the first 6 months have looked a little bit worse this year than 2020, we can see now that we have excellent pickup during the quarter and expect to go above the net add curve from last year. So I think that's fundamentally a pretty positive sign that we keep adding more net adds, more subscribers year-over-year.And these are the 2 curves showing basically the Nordic business and the non-Nordic business. So the Nordic business is growing at about 15% and the non-Nordic business, which is really where we have had great hopes to find exponential growth, it's not really performing as strongly as we were hoping earlier this year. It's still growing, it's growing at a healthy pace of 40% to 50%, but it's not as high as we would have expected it.So I hand over to Ingrid to walk us through the market section.

[Ingrid Welinder Bojner, Chief Commercial Officer]

Yes. So very positively, we have passed the 1 million paying subscribers in our Nordic markets and as Jonas explained, continue to add subscribers and customers, and we're happy to deliver a positive service for our customers. When it comes to the outside Nordic, we are continuing to do a local product market fit to find adaptation and growth in a healthy way. We have raised our prices, both in the Nordics and outside. And also, we have actually adjusted prices downwards in our Spanish market in the -- earlier this year.Yes. We continue to also launch new types of subscriptions. That's going to be a positive mix for us so that we can elaborate with that. And very positively, we launched a student subscription right before the summer, which we think is good for the student segment.Yes. Consumption is tracking against our subscriber growth. We added about 20% new consumption on our content. And of course, we continue to produce so that we continue to increase our catalog and our offering for our customers. So that's up 40% from last Q2 2020. And we also continue to invest heavily in interesting content, and we're very happy to announce the collaboration with Conan Doyle Estate with Sherlock Holmes that's going to be released in the next year.

[Jonas Tellander, Founder, President, CEO & Director]

And looking at product platform and partnerships. I think we're tracking well on the rating side in Google and on App Store, approximately as before. The net promoter score also still a strong one, not an outstanding excellent one, but a pretty good one at 32/31.We also keep adding more payment integration. So payment alternatives actually vary across the world, there's no global standard for that. So you need to keep adding local versions of payment options. And one of this is Checkout.com that we added in the MENA region, which is starting to grow very nicely.We also announced an Apple Watch app where you can listen basically offline to your books in the Apple Watch. And as I said before, we're expecting to launch a Spotify partnership by the end of the year.So to end up this section, basically if you look at the People, Culture, and Sustainability part, this is something we've been very focused on for the past 3 years, at least, and we have sustainability reports added to our annual report, which I think you should read.What we did most recently is to actually instill a sustainability committee, which is linked to the Board of Directors just the same way as the audit committee. And the purpose of this committee is to oversee Storytel's strategic sustainability work and support the Board in fulfilling its responsibility to specifically address climate and environmental matters, human rights, labor standards and anticorruption practices. So more of that in the future.With that, I hand over to Sofie to walk us through the numbers.

[Sofie Zettergren, Chief Financial Officer]

Yes. Thank you, Jonas. So looking at the streaming topline and profitability, we continue to grow our revenues quarter-by-quarter, amounting to SEK 545 million in Q2 2021, around SEK 423 million coming from the Nordics segment and SEK 122 million coming from outside of the Nordics.Subscriber base averaged more than 980,000 subscribers in the Nordic segment. And as Ingrid mentioned, we surpassed the 1 million mark in the Nordic segment, which is very promising and a big milestone for Storytel.We continue also to have a very high ARPU in the Nordics, up from SEK 140 to SEK 143 during the quarter and also with very high profitability. So contribution margin, 30% in the Nordic segment, positively impacted by the acquisition of Lind & Company, but also somewhat offset by increased content cost in some markets compared to the same period prior year, but very stable at 30%.And then in the non-Nordic segment, subscriber base averaged 643,000 subscribers, ARPU down slightly, but going up again in the Q3 guidance. We continue to have healthy gross margins in the non-Nordic segment as well. But since we increased marketing investments and continue to invest in many markets, the contribution margin is negative at 17%, pretty much in line with Q1.And taking a glance at the Q3 forecast, we expect streaming revenue to come in at SEK 586 million and the subscriber base at 1,723,000 subscribers with a continued ARPU or similar ARPU as Q2, so SEK 113.And if we go to the final slide, given the performance we have seen now in the first half year and also the Q3 guidance that we gave this quarter, we revised our forecast for 2021 downwards. We expect streaming revenues to -- amount to SEK 2.25 billion to SEK 2.3 billion, equaling 20% to 22% revenue growth. And although, we do expect revenue growth year-on-year to go up in Q4, it will not compensate for the first 3 quarter, but we still think it's very promising that it's going up.In Q4, subscriber base expected to come in at around 2 million subscribers, which is also, of course, a big milestone for us. And yes, the reasoning why we think that the year-on-year growth will significantly increase in Q4 is that we are increasing marketing investments in some of our top-performing markets, where we see that the unaided awareness is still fairly low, and the metrics looks good. So we feel confident in increasing those marketing investments in the Nordics and also in Poland and the Netherlands, to name a few. So that will have an impact on the EBITDA margin for 2021 given the revenue growth. So we revised it to 6% to 8% negative EBITDA margin from 0% to 5%.And yes, what else to say here, so we could just take a quick glance also at the 2023. So the midterm targets, we still see that -- I mean the audiobook market is growing. It's growing exponentially outside -- or in the total audiobook market and we have a very strong position to gain grounds, and we expect our revenue growth to increase in the next coming years. So that's why we feel confident that we will still be able to pass 30% revenue growth, with the organic growth that we see today and then adding new market launches, more partnerships and also a possible M&A.And we continue to prioritize growth over profitability, although, of course, it is important for us to also show streaming profitability on a local level. That's why we keep the goal to reach that within 5 years from launch.

[Sofie Zettergren, Chief Financial Officer]

So with that, we will hand over to Q&A session with the analysts. So let us see if there's any questions from the analysts. I see some hands raising -- from Joachim from DNB. Do you want to go first?

[Joachim Gunell, Junior Analyst]

Yes, please. I hope you both can hear me. So can you perhaps comment a bit here on how we think about slightly lower I mean subscriber intake guidance here with relation to the higher marketing spend? How much of the weakness which you ascribe to LATAM and Spain is a function of, call it, pandemic pull-forward, et cetera, versus a function of I mean pricing competition or cut rate and product matter.

[Jonas Tellander, Founder, President, CEO & Director]

I mean we think that looking at the LATAM markets, I think looking back one year and what we expected to see from those markets, I think if they had grown as we expected, we would have added a couple of percent to our overall growth rate. That's not what's happening now. They've been totally flat. We think that a lot is due to the economic conditions rather than the specific audiobook market or competition is still incredibly in mature markets. And I think that's on the audiobook side.I think that's basically the -- I think if I try to look back at how we have expanded in the past couple of years, we can still see, if we look at the numbers that the Nordics and a couple of more markets have really been the locomotive of drying starts for this growth. And then we are investing a lot in catalog and maybe a little bit too much in some markets in marketing, given how long it will take to actually help people understand what the audiobook is about.So we're now starting to realize that those markets will take a little bit of time, in particular with the economic turmoil after COVID in the LATAM and Spanish markets. We think that we just have to buy their time and wait until the economic market climate picks up there.But other than that, I think what we're doing now, what Sofie explained, which is basically going to the Netherlands, going to Finland, going to Poland and ensure that we raise our unaided awareness is I think really the right way to go. You can see a very strong correlation between the unaided awareness and the penetration levels of 5% that we reached in the Nordic market.

[Sofie Zettergren, Chief Financial Officer]

Derek, Please go ahead.

[Derek Laliberte, Research Analyst]

So I was wondering a bit -- I mean, given the lower growth we've seen this year and some deceleration in subscriber growth in general, specifically in the non-Nordics market, it seems like you're now referring more to a midterm target up to 2023 of 30% to 35% growth rate, which if you're being picked at least, is somewhat below the roughly 35% market target you gave at the Capital Markets Day last year. So should we view this as a sort of a slight change to the midterm guidance? And then in general, what's reasonable to expect on years if you can give any flavor or comments on that would be very helpful.

[Jonas Tellander, Founder, President, CEO & Director]

I mean if you look at it for the long term, we believe that the audiobook market worldwide will grow from SEK 40 billion to SEK 200 billion until 2030, and we should have a 15% share of that at least which is SEK 30 billion compared to SEK 2 billion today. To get to that, we need to grow at an average of somewhere between 25% and 30% annually. And if that's going to happen right now or if it's going to happen in a couple of years from now, I think the average for this time period needs to be the 25% to 30%.And yes, you're right, we have revised 35%, moved it down a little bit to 30%, 35%. And I think that's just the way of us saying that listen, we understand that we're not delivering on our promises right now. If you look at the growth, the revenue growth at Storytel has been 20% now for I think 5 quarters. So that's now changed. The question is just why can't we deliver this increased growth rate that we were expecting and jump from 20% to 30%. And we're not seeing that right now. I think that probably we have not the right mix of markets that can contribute to that totally because we're very heavily tilted towards the Nordic region, with 78% of the sales there. And we need to add these non-Nordic markets to a greater extent, which they are going to be that we're going to contribute this additional 15% growth.We're not entirely clear on today, but we think that 25% growth end of the year is what we can deliver. And until 2023, we should be able to update a couple of notches to 30% at least, with possibly additional markets, maybe more mature markets, possibly with M&A as well and also with an intense focus I think on partnerships. We don't know what a partnership with Spotify or any other big player can entail, but we think that it's a good path to pursue and we're going to do that.

[Sofie Zettergren, Chief Financial Officer]

Stefan from Pareto. We can't see your picture, but I believe you have a question, right?

[Jonas Tellander, Founder, President, CEO & Director]

The audio is not good. We can't hear you at all.

[Sofie Zettergren, Chief Financial Officer]

Stefan, we can't hear you, so. Stefan, we can't hear you, so perhaps if you have a question, Stefan, you can send it in through text. We can't really hear you.So Joachim, please go ahead with your next question.

[Joachim Gunell, Junior Analyst]

Yes. So I think that -- I mean with regards to your 2021 revised guidance, I mean as I understand, it's fully organic. It does not include what potential upside you might see from the quantified partnership or M&A for that matter. But on the medium term target, is that also entirely organic? Or does that entail more I mean strategic I mean investments or for that matter also M&A? And in order to deliver on the I mean 30% to 35% growth rates, can you talk a bit about what -- I mean what the investments need to be taken to achieve that as opposed to what you have done already through the past couple of quarters?

[Jonas Tellander, Founder, President, CEO & Director]

Yes. I mean looking at M&A, as you say, I mean we haven't done a lot of streaming. We haven't done any streaming M&As that are adding significant additions to our streaming revenue growth. I mean if we were to do one, that would add maybe, I don't know, SEK 100 million, SEK 200 million to our top line then. That would be a one-off effect and wouldn't help us kind of in the following years.I think what we have done, I think that's what Sofie explained, is to really go through our allocation on marketing investments and ensure now that we allocate those to the markets where we feel that we have best payoff in the near term and where we have possibly underinvested historically. So those are a couple of our -- basically our top 8, top 9 markets where we now see that we should intensify our focus because these markets are nowhere mature yet. There's still a lot of room for growth.On the partnership side, we have some local partnerships in different markets, but I think we are now in a position in the audiobook world where we can go out and find a good, interesting agreement where we can work with some of the bigger players, either on the telco side or on the streaming side or in other ways. So I think that's what we're now realizing. We should have done this a lot earlier and now we're going to be very aggressive on that front as well.

[Sofie Zettergren, Chief Financial Officer]

So let's do every other question, I guess. So Derek, do you have another question?

[Derek Laliberte, Research Analyst]

Absolutely. So just to continue on the path here, I think that given your -- the estimate now for the third quarter and also the lower guidance for the full year, this still implies clearly a rather hefty acceleration in the fourth quarter. Could you comment a bit on which markets you expect will contribute here? And also why this increase or acceleration will come at this particular point in time? Is it that -- this is about marketing investments that you're putting in now in the third quarter and also the upcoming in Q4? Or are there also other parameters here in terms of the timing of it.

[Jonas Tellander, Founder, President, CEO & Director]

Great question. Ingrid will respond to that.

[Ingrid Welinder Bojner, Chief Commercial Officer]

So yes, I think we will see basically 2 effects. One of them is our year-long investments in new subscription models to really be much better at the local product market fit. We have so far enjoyed a very loyal subscriber base in many of the newer markets that are the first curve or the first movers basically in the consumer segments in audiobooks. And I think with the Light product that we have launched as well as the Select product, we have now an opportunity also reach much wider audience. So that's why we feel more secure that the Q4 will take off. And I think especially, we can mention a couple of countries like Turkey, India and continuously good efforts in Russia.And then the second one is of course the marketing investment, which is also something that then this year looks worse on the EBITDA side. But we do quite a lot of large investments in countries where we feel that we have good traction, but maybe we have diverted our marketing efforts to every country rather to the countries where it would bear most fruit. So talking about what Sofie said about continuous investments in the Nordics and especially in Northern Europe.

[Sofie Zettergren, Chief Financial Officer]

So Joachim, Please go ahead.

[Joachim Gunell, Junior Analyst]

And perhaps coming back to the Nordic markets, which is obviously, despite having reached a quite -- or not perhaps mature, but a mature state, but still being able to grow at a quite attractive level. But we have seen in the first couple of quarters, if anything, is a tight contraction on the contribution margin side, although you have I mean initiated some price increases, which I would have thought would have come down greatly on the contribution profit side. So can you talk a bit about what is driving the incremental margin here in the Nordics and I mean if it's competition or if anything?

[Sofie Zettergren, Chief Financial Officer]

Yes. So I can answer that question. So what we have seen as Ingrid showed in one of the slides is that I mean the consumption continues to increase and it increased quite hefty in Q1. And given some -- I mean, we can't comment on specific agreements, but we do -- we have seen that the content cost in some of the Nordic markets have increased in Q1 and Q2 compared to the same quarter last year, but we expect, of course, to come back to the levels where we were in 2020. And then we saw, as I said, a positive effect also from Lind & Co, which came into the group 1st of April and we continue to have a good internal share of consumption, which is an important metric for us.And then of course I mean we have 4 out of 5 markets being profitable in the Nordic segment, but then we have Finland, which is still on the path to reach profitability and they have a lower contribution margin of course given the marketing investment, so that also has some effect on the total contribution margin in the Nordics.

[Joachim Gunell, Junior Analyst]

Understood. A follow-up on that. Can you talk about -- I mean, what is driving the slightly higher content in the Norway and Finland, given that -- I mean is this a function of I mean higher royalties or renegotiated royalty agreements? And what can we expect here for the coming year?

[Jonas Tellander, Founder, President, CEO & Director]

Yes. I mean as the audiobook market matures, of course the different incumbents and ourselves are having discussions on what reasonable levels of payments can be. And we had the situation in Sweden a couple of years ago with Bonnier, where we didn't get the -- we had the conflict basically for a couple of months and then we sold it. And I think that we have ongoing discussions like this on a couple of the markets where the audiobook market starts to become interesting as an alternative to the physical book market. And therefore, temporarily, I think that this worsen margins can happen. Yes, it's content cost right now and we're just working to find a good balance there.

[Sofie Zettergren, Chief Financial Officer]

Derek, Please go ahead.

[Derek Laliberte, Research Analyst]

So I had a question on -- I think it was during the quarter here, the publishing house Egmont bought Bonnier share of Cappelen Damm, which is -- which you basically co-own the Storytel Norway business with them. And we've also seen Bonnier acquiring a majority -- I think it was in the Strawberry Publishing Company. I was wondering what's your view on this and sort of the dynamics of I guess the Norwegian audiobook market going forward in light of this? And is this in any way affecting your sort of ability to acquire content, such as Strawberry, which I assume has some pretty attractive content in the country?

[Jonas Tellander, Founder, President, CEO & Director]

Storytel -- good question, Derek. So Storytel's market position in Norway is very strong. We have very high market share there and keep growing. Looks like we'll have an amazing summer there. And we also raised prices recently. So basically looking at the content side of things, I mean we have a joint venture with Cappelen Damm, which is the by far biggest Norwegian book publishing house with I think a 40% market share. And we've had that since 8 years back -- 7 years back.It's a great collaboration where we've been equally interested in investing in the audiobook market. They are producing the content basically and we're providing the platform and the service, and are working jointly on the Board. So I think that -- what changes now is that the ownership of Cappelen Damm changes from being both Bonnier and Egmont 50-50 to being only Egmont now. And it's not something that directly affects the collaboration there. So we just need to ensure that we have a good working mode on the Board there and then also are well connected, of course, and talked to Egmont's management team and have shared view of the future. So yes. So it doesn't affect our -- since we don't do any books more or less in Norway, it doesn't really affect us as such.

[Sofie Zettergren, Chief Financial Officer]

Yes. Joachim, please go ahead.

[Joachim Gunell, Junior Analyst]

Yes. So can you say anything more? I mean, it's been a couple of months now since we heard -- presented or announced the partnership here with Spotify. So is there any more I mean incremental information that we can provide in terms of -- I fully understand that, okay, you can perhaps elaborate too much on the economic details of the arrangement. But how this will really I mean allow you to fuel growth perhaps even above the targeted midterm growth rates here? Is this to be seen as a way for you to drive or accelerate, grow at a very, say, low subscription acquisition cost or perhaps if there's anything more to it that you want to dive further into?

[Jonas Tellander, Founder, President, CEO & Director]

You can think of it us -- I think Spotify's vision with our open platform is to become -- what I think they call it a singular audio platform. And basically I think you can view it as, I don't know, app store for audio or a Google for audio. And that -- we will have a place there, hopefully, a prominent place with a good collaboration, but that's too soon to say. The target is still to announce or to release this to customers by the end of the year. And the focus is entirely on making sure that we have a great user experience in terms of discovering the content on Spotify and then feeling attractive enough to start listening to the content and using Storytel subscription or signing up for Storytel subscription to do it.

[Joachim Gunell, Junior Analyst]

And then in terms of when we could expect, I mean any further details on this? You mentioned that okay, later this year, but is that more tilted towards the Q4? Or is there anything I mean in terms of when this open access platform with one it will actually launch?

[Jonas Tellander, Founder, President, CEO & Director]

Yes. I think the teams are working towards a deadline sometimes in Q4, but I can't be more specific than that.

[Sofie Zettergren, Chief Financial Officer]

Derek, do you have another question?

[Derek Laliberte, Research Analyst]

I do. So I had a question on -- I think it seems like you've been a bit more active with price adjustments or rather price increases in your different markets of late. So wondering if you could just give a general sort of idea of the different rationales behind this, if it's a better capital or loyal customer base or what it might be? And yes, just that and sort of the outcome and effects of this so far, would be really interesting to hear.

[Jonas Tellander, Founder, President, CEO & Director]

I can start and then Ingrid can fill in. But basically, yes, we have seen over the years that us we keep investing in a much, much better service and content catalog, we see that it will get improved access to very strong audiobooks and are more than willing to pay for that. I mean, you have to compare to the rest of the book market, which where books are typically priced even higher.So in the Nordic region, I think there's a big appetite for great stories written by amazing authors. And what we do is just to ensure that I think that's priced adequately. And we can see that from the churn numbers and the loyalty that typically entails our price increases that this is the right thing to do. It's good for the author community, it's good for the publisher community, and the customer gets a very good experience and good value for money.

[Ingrid Welinder Bojner, Chief Commercial Officer]

I think we can maybe complement with the fact that we also have adopted our subscription models so that in some of the markets, we also launched Light product, which is consumption up to a specific figure of number of hours. So that ensures that the people who are just new to the service or are not such a high consuming segment, yet can still enjoy the service at a reasonable price. So that's how we elaborate also with that in those markets that we try to increase the prices and to ensure exactly what Jonas said, a healthy contribution to the publishing market and of course, the authors and creators.

[Sofie Zettergren, Chief Financial Officer]

Joachim, back to you.

[Joachim Gunell, Junior Analyst]

Yes. Just a final one for me. So when it comes to the fleet here or the recently launched offering in Brazil, I mean obviously it's -- you comment here that the subscriber or the number of customers that have enrolled is quite sizable to say the least. But still, there has been slight conversion here. The numbers you mentioned in conjunction with the Q1 results were slightly more encouraging than your commentary as of now. So -- and since you are talking about elaborating this tier also in other markets, perhaps, what do you need to be seen to get further confidence in this model? And when would you perhaps believe it is fair to actually start I mean including these I mean subscribers in your subscriber numbers for total as a group.

[Ingrid Welinder Bojner, Chief Commercial Officer]

Good that you pointed that out in terms of how the subscriber of the free product is going in Brazil. So what we have done is really to launch in a very immature audiobook industry in Brazil. And together with the publishing community, we will actually launch a product that would entail that people would find this product and start listening to books. It's been quite interesting to see how the free community have listened to different audiobooks in relation to our paid subscriber base.The consumption is quite different actually. So while our free subscribers are finding content, which are much more well-known and kind of old stories whereas the community that are paying for the service is finding much more newer content.So I think what we're doing here is really to try to understand how these different subscriber basis or consumer basis are functioning and how they use the service, how they interact with us. And of course, what we need to see is that people will find also the newer content and be willing to pay for it. So this is what we will continue to elaborate with together with our Brazilian team and possibly also launch it in maybe one more pilot market to see how that could add to the flavor or bouquet of different subscription services that we have or models.

[Sofie Zettergren, Chief Financial Officer]

Okay. Derek, did you have a final question, perhaps?

[Derek Laliberte, Research Analyst]

Yes. I have a final one and it was just on the sort of marketing activity currently and for the upcoming quarter. You mentioned Poland and Netherlands and then more markets that you would be heavily tilted against. And also if you could say something about like how much of this spend is related to a more general brand awareness and how much is more of a sort of direct conversion character?

[Ingrid Welinder Bojner, Chief Commercial Officer]

Yes, over the year, we've actually worked very closely with our online partners in terms of marketing efforts to implement a center of excellence for performance marketing. So I think that has sort of tilted our efforts a little bit more against the performance marketing bouquet of marketing. And of course, that needs to be a balance between the performance marketing versus brand building.And what we have in the plans now is to refocus a little bit of those efforts or strengthening the efforts to also continuously build the brand long term because we see that's important. People know about audiobooks, they know about Storytel, but we also have been increasingly focused on talking about the content in our performance marketing whereas maybe we also need to divert some of the investments to build the continuous Storytel brand to help the unaided awareness.

[Jonas Tellander, Founder, President, CEO & Director]

Good. So thank you so much for tuning in. This of course has been a hard webcast for us. We're not super happy ourselves that we can't meet the future guidance that we set up before.On the positive note, we are performing as we have been in the past. And we actually think that the Q4 performance will increase from 20% to 25% top line growth. That's our target, at least. We haven't added any M&A. And frankly, in our 35% long-term guidance, of course, M&A is a part of that equation and could possibly come up going forward. But we do look at the business now and see how can we create some short to mid-term growth and not only have a focus on these very long term immature audiobook markets. There needs to be balanced and our target is to ensure that, that balance results in the 30% to 35% top line growth. So thank you for turning in and till next time.