HomeToGo SE

XETRA:HTG

Earnings Call Transcript 2022-Q2

[Operator]

Good day, and welcome to the HomeToGo Q2 2022 Earnings Call. Today's conference is being recorded. At this time, I'd like to turn the call over to Jan Edelmann. Please go ahead.

[Jan Edelmann, executive]

Good afternoon, ladies and gentlemen, and welcome to Contego Q2 2022 Earnings Call. With me today are our Co-founder and CEO, Dr Andrae, who will give you an update on our strategic achievements of the first half of 2022 as well as has a snapshot on our path to profitability by the full year 2023. And our CFO, Steffen Schneider, who will walk you through the Q2 financials and our confirmed full year '22 outlook. Please note, as always, this call is being recorded and we upload to our website. It will be available as a replay later today. Patrick, I will hand it now over to you. Please go ahead.

[Patrick Andrae, executive]

Thank you, Jan, and a warm welcome to all of you from my side as well. Thank you. Thanks for joining our call today. It's my pleasure to share that we have had another stellar quarter at HomeToGo. But let me first tell you the strategic perspective. Our vision to make incredible homes easily accessible to everyone, is enabling us to play a bigger and bigger role every day for both travelers and our supply partners. Hence, we set the foundation to continue our strong growth in the future.

We again delivered another quarter of strong financial performance. All of this is a testament to the agility and talent across our HomeToGo team, whom I would like to hereby thank once again for their incredible dedication to building an experience for our travelers and supply partners both. So let me now share some of the key highlights of our second quarter 2022. Firstly, we observed another stellar financial performance, including record high IFRS revenues, a growth of plus 83% year-over-year to almost EUR 38 million.

Compared to 2019, plus 126% in this quarter. And this, amid a strong like-for-like growth and positive first-time consolidation effect mainly from our acquisition of Adomevia as well as further decreasing cancellations, which are still above prepandemic levels. We also saw a sizable improvement in our year-over-year profitability with an adjusted EBITDA of minus EUR 6.4 million compared to minus EUR 17.5 million in quarter 2 last year. And this despite an increased absolute spend on marketing during the quarter. That means an incredible 68 percentage point increase in our EBITDA margin compared to last year.

We also saw continued strong progress on our strategic initiatives to make incredible homes easily accessible to everyone, building deeper relationships with travelers and further progressing on our on-site business growth during quarter 2. Our on-site share already reached 56% of booking revenues, excluding subscription and services in the first half year of 2022, and finished the first half year with a Q2 record share of 57%. Subscription and services grew an outstanding 115% during quarter 2 compared to '21, including a strong performance by one of HomeToGo's acquisitions, Smoobu.

We confirmed our updated financial '22 outlook for May and are confident in this. We continue to expect IFRS revenue growth of 40% to 50% to EUR 133 million to EUR 143 million, and an adjusted EBITDA of minus EUR 22 million to minus EUR 32 million. And this on the back of a very strong start into quarter 3 with a new all-time high in booking revenues for July and amid a stellar last-minute business. Given the strong booking backlog, even accounting for cancellations, we feel very comfortable about the guidance and can already shift our focus to the financial year '23.

And so last but not least, we reiterate our commitment of achieving adjusted EBITDA breakeven profitability by financial year '23. For our business update, let me first remind you of our key platform dynamics, both on the traveler as well as the partner side. We have 3 key strategic levers to fulfill our vision of how we are making incredible homes easily accessible to everyone. First, our travelers. We are creating an unparalleled experience to drive return demand. We will achieve this by building an even more attractive and inspiring customer experience, especially across both our on-site experience and our apps.

Secondly, our supply. We continue to grow our global footprint and scale our diversified supply to offer our travelers unlimited choice on our platform and provide partners a unique opportunity to grow their own business on HomeToGo. And third, our technology. We are developing new tech solutions to enable growth for our partners and the entire alternative accommodation industry to become the industry's operating system. Basically building services around and out of our marketplace platform.

And now let me provide you with more details on the progress with regards to key strategic pillars. In line with our strong top line development during the first half of '22 and quarter 2, in particular, we also made great progress in our fundamentals during the first 6 months of the year. So let us take a look at some of the key customer and partner metrics. Since providing public disclosure of our financials and non-financial KPIs, we've seen these metrics develop very positively, with this trend continuing throughout the first half of '22.

We are making great progress on keeping our customer relations. It's our efforts to deliver our experience, observing an increase in booking revenues from returning visitors. Booking revenues from these visitors accounted for more than 65% of total booking revenues during half year 1. And we believe that investments into our customer experience and on-site bookings are key levers to increase the amount of customers coming back to our platform, which improves our marketing efficiency and supports our path to profitability and long-term margin ambitions.

Secondly, in addition, we've made great progress on our second strategic initiative, which is our supply. With the goal of having more and more of our business directly on site on our platform, meaning the traveler searches books and paid for rental and entire year HomeToGo without leasing out to a partner. During the first 6 months of the year, our on-site share amounted to 56%. This means share on-site in half year 1 grew by 15 percentage points from 41% in '21.

And on-site IFRS revenues, in absolute terms, grew a stellar plus 279% year-over-year. And finally, we progressed well with respect to our third strategic initiative, our tech solutions that are building an ecosystem for the industry. The alternative accommodation market, as you probably know, is large and highly pregnant with a strong desire for advanced tech abilities.

With our subscriptions and services, we are developing tools that can help suppliers tackle these challenges and scale their own businesses. And in the first 6 months of 2022, IFRS revenues from subscription and services grew at a very strong pace of 112% year-over-year. So there has been great progress in the first half of the year that drives the long-term success of HomeToGo, and ultimately moves us continuously forward to the next evolutionary step of the company, which is reaching EBITDA breakeven by financial year '23.

Now let's look more closely at metric tied to a few of our key strategic priorities. Between April and June, we saw more than 70% growth in new partner launches on our platform, versus the same period in the year before. And as a result, we brought tens of thousands of new highly sought-after offers onto our marketplace to continue delivering on selection. What's really compelling about these new partners - looking, for instance, at the last 100 new integrated partners to our marketplace, we are happy to report that those had an effective take rate of more than 13%, well above our efforts.

And our partners see the value in joining our platform as they can tap into a highly engaged and growing customer base. This engagement is notably high for those users using the HomeToGo app, which is evolving to be one of our central drivers for attracting returning visitors and customers that book again, who we call repeat customers. For the past year, we have grown the number of monthly active users in our app by more than 60%. This translates into a much larger pool of highly engaged customers for whom we can create repeat booking driving features, and recommend content that drives that bookings at 2 points of their customer journey.

And as a result, we drive more profitability from each of those. So to give you an idea, the marketing spend required to drive bookings for travelers that have booked on-site with us is 19x lower than the spend required to acquire other or new customers. And so we continue to increase the share of subsequent bookings by building our on-site inventory and investing into content and recommendations. So, we expect ongoing improvement in our marketing efficiency over time, translating into tangible results in our bottom line on our way to profitability. With these strategic developments in mind, we believe that the time has come to take the next evolutionary step in our company's history.

Last year, we set the goal ourselves to achieve breakeven profitability on an adjusted EBITDA level within the next 2 years. Today, I am proud to reiterate this goal to turn the company-adjusted EBITDA breakeven by financial year '23. In order to turn the company-adjusted EBITDA breakeven by financial year '23, we already started executing our road map of top line costs and operating measures. Top line measures include, next to our fundamental actions to further improve our top line, we are taking immediate steps to consolidate partner contracts within the group to gain intake rate.

We expect these margin improvements to increase our top line and positively impact our bottom line given the low effort required in executing these advancements. Additionally, while segmenting our market depends on maturity, we have identified promising actions to leverage existing and new inventory to maximize our overall contribution margin, especially in what we call lighthouse destinations. On the cost efficiency side, we will increase our marketing efficiency by tighter steering of our ROI-based marketing approach across all markets to optimize our profitability.

Further marketing efficiency improvements will be realized by continued investments in scaling our repeat and top of funnel business, leading to even stronger and deeper customer relationships. And last but not least, operating measures. Following our already sustainable recruiting strategy, we will limit hiring to strategic priorities and focus on fostering our proven entrepreneurial routes to efficiently tackle our biggest steps. We reviewed our resources company-wide to allocate them to the top strategic priorities. And we will also lift further synergy potential from our acquisition to drive economic scope.

So finally, given our experience and learning of resilience throughout the pandemic, we are confident that our plan, including these measures, will allow us to achieve adjusted EBITDA breakeven by '23, while leaving us able to pursue profitable growth options. And, therefore, focusing on the next steps in our company's development. So, this concludes the business update from my side. And now I would like to hand over to our CFO, Steffen, to guide you through our Q2 financial performance update.

[Steffen Schneider, executive]

Thank you, Patrick, for the business update. A very warm welcome to our Q2 earnings call from my side as well. Looking back at Q2, we are pleased to report that we were able to provide significant strategic progress with strong financial results. Let's first dive deeper into our strong Q2 performance by looking at our core KPIs. Q2 was another quarter with a remarkable financial performance. Booking revenue grew a solid 10% year-over-year to EUR 46 million.

Looking at the comparison to 2019, they grew by more than 120%, a new all-time high for any given quarter. This is particularly noteworthy as we compare ourselves against a tough prior year comparator, when traveler bookings largely centered in Q2 '21 as Europe came out of COVID restrictions, while it was more evenly distributed among Q1 and Q2 this year. On-site booking revenues grew 12% year-over-year, reflecting our strategic progress on shifting to on-site and also a new all-time high for any given quarter.

Also here, we can very well see the more even distribution over the quarters in 2022 compared to last year. IFRS revenues grew an exceptional 83% compared to the prior year, resulting in a new record high in IFRS revenues during Q2. This growth was driven by an accelerated on-site business of more than 250% year-over-year, and further decreasing cancellations - but still above pre-pandemic levels. We are comparing cancellation rates between around 20% for CPA this year compared to 26% in the Q2 last year.

In addition to very strong growth momentum, we were able to significantly improve profitability in Q2 and H1 as measured by adjusted EBITDA, both in absolute and relative terms. This improvement is quite significant compared to Q2 '21, with the margin increasing by more than 68 percentage points to minus 17% in terms of IFRS revenues, and resulting in an absolute adjusted EBITDA of minus EUR 6.4 million. This result was achieved amid an outstanding last-minute business and positive consolidation effects from the acquisitions of E-Domizil and SECRA, despite continued customer acquisition and retention investments as shown in higher absolute marketing spend.

In addition, favorable FX developments, in the amount of about EUR 1.6 million, contributed to our friendly EBITDA development. As we discuss our top-line performance on the slide before, let me just quickly highlight a few additional details here. Subscription and services booking revenues also contributed strongly, with about 117% year-over-year growth to EUR 4.6 million; reflecting a strong like-for-like growth based on the performance of Smoobu as well as the first consolidation of LICA for the month of June.

IFRS revenues grew by more than 250% based on the very strong CPA on-site business, growing a dimensional subscription and service as well as strong CPC. Looking at Q1 as a whole, we saw a similar development among our key top line metrics as we did during Q2. GBV was almost flat. Our core KPI booking revenues expanded by 21% on a year-over-year basis or 90% when we compare to 2019.

And finally, IFRS revenues advanced by an exceptionally strong 88% or 97% year-over 2019. Even following the strong growth in realized IFRS revenues, our booking revenues backlog for check-in in 2022 continues to be very strong. This gives us good visibility into future revenues and will be recognized as IFRS revenues later this year, when travelers check into their booked accommodation. We will come back to the backlog as part of the outlook in a few slides.

Looking at the basket size, although we have a like-for-like ADR growth in most markets, the 12-month rolling average basket size decreased slightly by the year-over-year Q2 change was a bit more pronounced. This decrease results mainly from a change in regional mix, i.e., from higher ADR to lower ADR destinations as well as significantly more pre-summer bookings, which have, in general, a lower length of stay and ADR. Both effects were already observed in Q1 '22. Looking at the data in more detail, the picture is actually quite stable.

In Europe, the basket size slightly decreased year-over-year as a combination of slightly lower length of stay and slightly lower ADRs. This was driven by a mix of more bookings with travel days pre-summer, which tend to be shorter: i.e., week versus 2 weeks in the summer. And pre-summer travel also have lower ADRs than summer ones, and pre-summer prices are generally lower. In North America, mainly the U.S., the length of stay was almost stable at about 6.8 nights compared to 6.9 nights in the last year.

The ADR on the other hand, increased by 5% compared to last year, leading to a marginally increased North American basket size, a plus of 2.7%. Looking at the take rate, the average take rate continued on its positive trajectory, averaging 9.3% in H1 and even 9.6% when we just look at Q2. That's plus 1.1 percentage points ahead of last year's Q2 and ahead of year guidance based on strong on-site business. The CPA take rate averaged almost 10%, while the other take rate amounted to 8.7% in the past 3 months, appreciating by 1.4 and 1.3 percentage points year-over-year, respectively.

Since we already discussed our on-site progress in depth, I will use this slide to quickly summarize key highlights of our continued growth. Our overall on-site share continued to increase to 56% in H1 and even to 57% in Q2. Looking just at Europe, we increased our on-site share in the first half to 64%, compared to 62% in the last year. In the U.S., we continue to make progress with our on-site share increasing by a strong 13 percentage points to 15 in terms of booking revenue share.

In H1 overall, on-site bookings increased by 61% to 429,000 bookings, underlining the beforementioned pre-summer bookings. Let's now turn to profitability. As we discussed adjusted EBITDA before, let me just highlight that profitability in the first half of the year is usually lower than the second half. HomeToGo recognizes the majority of marketing expenses are in the first half of the year, when travellers book a trip, and is evidenced in the high booking revenues.

Corresponding IFRS revenues are recognized upon check-in, with the majority of customers traveling in the second half of the year. Therefore, this improvement is quite significant compared to Q2 '21, with the margin increasing by more than 68 percentage points to minus 17% in terms of IFRS revenues, and resulting in an absolute adjusted EBITDA of minus EUR 6.4 million. Let me briefly use this opportunity to comment on the positive development of our net income as well.

In Q2 2022, the group incurred a consolidated net loss of minus EUR 18.7 million compared to minus EUR 38.7 million in Q2 '21. The improvement compared to the previous period is largely related to the strong operational performance of our business, as reflected in the performance of our adjusted EBITDA. Let me now give you a bit more color on our cost-line development, which drove group level profitability. Gross margin decreased by 5.2 percentage points year-over-year in Q2 '22, mainly due to further amortization in the amount of EUR 1.6 million of the booking backlog recognized as part of the E-Domizil purchase price allocation.

Our sales and marketing cost ratio improved by 64 percentage points year-over-year, largely benefiting from strong organic demand and high business volume. In absolute terms, however, marketing and sales expenses increased by an additional EUR 2.1 million. The cost ratio in product development also slightly improved year-over-year by 0.2 percentage points, despite the increase in both the scope of consolidation due to the acquisitions as well as the company's staff dedicated to product and development.

Last but not least, G&A improved by 2.6 percentage points, mainly as a result of economies of scale. Turning now to our cash-related items: during Q2, we recorded a negative net working capital of minus EUR 24.5 million, mainly as a result of advanced payment by travelers. These payments are booked as a partner payable and reflect mainly 2 things. One, the acquisition of E-Domizil with their policy to collect the cash for their partners; and 2, HomeToGo's own effort to process payment ourselves and, therefore, collect the pre-payments by our travelers.

The net working capital would have been positive if we would have included receivables from existing booking revenues. Technically, they only become receivables upon realization of IFRS revenues after check-in. Nevertheless, by the end of Q2, we had EUR 57 million of booking receivables on our books. And that's the number before cancellation. Looking at it after cancellation, that number would be around EUR 47 million, as mentioned before.

Looking at the cash flow or cash development, in Q2 we achieved an increase in our cash position in the period, in the amount of EUR 4 million positive; mainly as a result of a positive operating cash flow of about EUR 4.2 million, but also amid a positive investing cash flow of EUR 1.4 million, reflecting the acquisition of the remaining 81% stake in SECRA and the consolidation of cash acquired from both E-Domizil as well as SECRA. This positive development was partially offset by a negative financing cash flow of EUR 1.8 million for payments, including the principal portion of lease liabilities as well as the payment for outstanding loans.

As such, our cash position increased slightly to EUR 187 million, excluding cash, cash equivalents and other short-term highly liquid financial assets known as the money market fund, as you know from the prior earnings call at the end of Q2 '22. We therefore maintain our strong cash position to invest through cycle. Since we mentioned the customer prepayments, the liquidity position includes cash of EUR 7.2 million, which is restricted due to statutory requirements.

Let's now turn to the outlook as the last section of our presentation before we come to the Q&A. Before we focus on our confirmed '22 guidance, let me reiterate that we aim to take the next evolutionary step to achieve adjusted EBITDA breakeven by 2023. Please recall Patrick's comment from a few minutes ago. In line with our strategy to become the go-to destination for travelers, the key building blocks of this journey remain.

First, the deepening of our customer relationships through continued improvement of our customer experience. Second, the growth of supply, particularly on site; and third, enabling our ecosystem by developing new tech solutions that support growth for our partners and the entire alternative accommodation market, on our journey to becoming the industry's operating system. We aim to breakeven at the black zero by fiscal year '23 on an adjusted EBITDA level.

We furthermore reiterate that we expect the booking revenue CAGR of 30% to 35% in the coming years to achieve EUR 1 billion in booking revenues by either '28 or '29. And once that scales, we expect our business model to deliver a highly attractive margin profile of around 35% on an adjusted EBITDA level and strong double-digit cash generation. We will remain laser-focused on driving a successful transition to on-site, and to lay the foundation for future profitable growth. Looking again at the next month until the end of the year, we had the best month ever in HomeToGo's history for booking revenues in July.

Despite the current recession fears and concerns about the potential impact on vacation rentals, here is a look at our how vacation rentals have continued to prove resilient. Looking at our booking backlog, after cancellations for the last 5 months of 2022, we see a healthy booking amount with a very solid growth momentum year-over-year; and also for travel with check-in days after the core summer travel period. This is both on a like-for-like, and even more including our acquisition space.

With this strong backlog in the books for the remainder of the year, it enables us to fully focus on the planning for 2023 in order to make it a success in terms of both top and bottom line. With this in mind, let us reiterate our full year outlook. We confirm, and feel very comfortable with, IFRS revenue growth of 40% to 50%. From EUR 133 million to EUR 143 million, and adjusted EBITDA to be in the range of minus EUR 22 million to minus EUR 32 million, corresponding to a margin of minus 15% to minus 24%.

As always, let me close with a look at our current trading. July was an extraordinary start into Q3 with a new all-time high, including booking revenues for any given month, which is very unusual for July. In Q3, we anticipate booking revenues on the level of previous quarters and the highest quarterly IFRS revenues in HomeToGo's history. We expect to deliver Q3 '22 IFRS revenue growth of more than 50% compared to last year. We remain focused on delivering strong profitability, maintaining high marketing efficiency and managing fixed expense growth. Similar to IFRS revenues, adjusted EBITDA is strongest in Q3 due to the seasonality of our business. We expect to deliver an adjusted EBITDA margin of more than 25% during this quarter 3.

With this, let us now turn over to Q&A.

[Operator]

[Operator Instructions] Our first question is from Volker Bosse with Baader Bank.

[Volker Bosse, analyst]

Volker, Baader Bank. Congratulations on the great set of results for the second quarter. I would like to start with 3 questions. Most obviously, I think, is about the guidance. You announced 88% revenue growth in H1. You spoke about expecting July to be the best month ever. So, why do you remain shy and do not give a bit more positive wording on your given guidance from 40% to 50%, which would imply that you have a flat growth in the second half? It is most likely not realistic, but I am more than happy to get your view on that topic.

And the second question would be on the number of bookings. We spoke about a booking boom and travel boom. But if we look at your number of bookings in H1, it was rather flat in the second quarter. The number of bookings is down by 6%. So, perhaps I misunderstood something here. Perhaps you can clarify that as well.

And yes, last question is on the take rate. Thanks to the indication, we have an 8% take rate guidance in the full year '22. We already had, last year, an 8.4% take rate. We reported 9.3% in H1 here also. Are you a little bit too cautious or competitive? How do you come to the drop in take rates in the second half, which is implied in your 8% guidance?

[Patrick Andrae, executive]

Volker, thanks for your questions. So, to start with the first question. When we look at the business and how it is currently coming along, I feel very comfortable about the guidance. I could say that there's an upside risk, if you want to call it that, that we would hit the upper end of the guidance. So, if all continues as it does, then there is quite a high likelihood that this will come. We are monitoring this very closely and just wanted to get the Q3; and also look at it in September, then come back to you on the guidance.

But overall, I would rather see an upside risk that we would have to upgrade the guidance at some point in time, given what we currently see in the books: both in terms of bookings as well as what we get in terms of IFRS check-in. The second question was the number of bookings. So, as you know, our focus is on -- and I will combine it with your third question.

So we try to go for as many on-site bookings as we can. And yes, you're right, we are always a little bit cautious on certain items when it comes to guiding. We made very good progress when it came to on-site bookings and therefore, have really maximized the on-site bookings. That, of course, has significantly helped the take rate as the high share of on-site has clearly supported the take rate.

[Volker Bosse, analyst]

Okay. Thank you very much for the clarification. I understand to be cautious and to be qualitative, but you are so out of range then you should have something in mind which we do not know, or how can we take it? And also, on the EBITDA guidance for '23; you mean EBITDA positive on a full-year basis, right?

[Patrick Andrae, executive]

So for '23, our goal is to breakeven on an adjusted EBITDA basis with a black zero. And it's more than a black zero, I'm happy. But for now, we are guiding for the black zero. For '22, you have to see that there are still certain things to keep in mind. In an ideal world, we would already get quite a lot of bookings for '23 in the books now, which would lead to no IFRS revenues this year, but we would have the expenses already in it. While if we get more bookings with check in '22, we would still have the IFRS revenues in there. And that's a little bit of the playing field that we are looking at, and that was the reason why we didn't want to change the guidance yet. But as I said, as of now, we see more upside risk than anything else.

[Operator]

[Operator Instructions] We'll take our next question from Wolfgang Specht with Berenberg.

[Wolfgang Specht, analyst]

Also congratulations from my side. Two additional questions. First, on the subscription and service business: can you give us an idea of how much of the growth we've seen in Q2 or the first half was contributed by the consolidation effects?

And the second question: we saw a new financing round advocation rental software maker GestIT, which is already making more than EUR 50 million in revenue for what is similar to your subscription and service business. Don't you see a risk that you're problably scaling up Smoobu too slowly, and that they have to add some more scale here?

[Patrick Andrae, executive]

Thank you for the questions. So, answering on the composition of the growth. So obviously, the subscription and services part of our business there. We saw a strong performance by Smoobu growing at high double-digit percentage growth rate year-over-year. And amidst that, hiring a new salesperson to market our product and other parts of it. We also saw a strong performance of our subscription business by our South European subsidiaries.

The rest of the effect can also be calculated as a first-time consolidation, or partly to first-time consolidation for SECRA and the AMIVAC business that we acquired. If we look ahead, we see that half year 1 and quarter 2, also. As you just said, we're just at the beginning of the scaling of our subscription and services business, besides the acquisition of SECRA in June and AMIVAC in January.

And we also see, as I said before, strong organic growth. We are convinced that the medium term will show continued progress and share gains of this part of our business and of our overall revenues. If we turn to other people in the market. First of all, we are not commenting on other businesses. And secondly, this is obviously a huge market. Google, especially, has a very specific kind of customer that is not really comparable to a lot of other businesses out there. And as a strong performance and strong growth has been seen in that business at this point in time, we don't think that there is any problem.

[Operator]

We'll take our next question from Silvia Cuneo with Deutsche Bank.

[Silvia Cuneo, analyst]

Congratulations on the results today. I just wanted to ask a couple of questions about your top-line plans to reach breakeven next year. Firstly, could you please elaborate on your plans to optimize take rates by consolidating contracts? What order of magnitude of improvements could we expect? And does this relate to recent acquisitions, or are there specific geographies or types of customers where there is scope to make take rates improvements? And then connected to that, could you please describe in more detail the opportunities you see to better leverage inventory in lighthouse destinations, as you mentioned on the slides?

[Patrick Andrae, executive]

Thanks for all your questions. For sure, happy to answer. Around the take rate consolidation: obviously, we have acquired over time different businesses to HomeToGo. One of the latest was E-Domizil, as you know. We work from HomeToGo, but also from E-Domizil as an example, together with different partners. We try to like consolidate that into one group contract. With this also, we want to equalize the take rate. And obviously, going on the take rate that has the highest impact for us on that side to make sure that the group profits from the best kind of commercial agreement that we can get throughout the whole group.

Secondly, on the leverage on inventory for lighthouse destinations. This is basically looking into better understanding where in a specific destination. We created a lot of data around where we can better understand in which destinations we have a bigger share of certain inventory, where we need additional inventory, where we can leverage existing inventory better right from the beginning. And also play that back into our -- basically, from making marketing on the paid marketing side, but also on the SEO marketing side, through to end-to-end. The product, in terms of playing it back through ranking and machine learning, and then also delivering that back in the end.

A full cycle to our supply teams to get the right new inventory and look into inventory that we might already have where we lack, for instance, certain information from the data or partners where we identified possibilities and potentials to utilize this inventory even better. It's basically an end-to-end approach that we can put from marketing over product to supply, in leveraging existing MU inventory better.

[Operator]

And it appears we have no further questions. I would like to turn the call back over to our presenters for any additional closing remarks.

[Steffen Schneider, executive]

Thanks all for having joined our call today. I would just like to remind you that we will attend several conferences September and would love to see you around. For example, the Oktoberfest conference in Munich in September, where we will attend 2 conferences. And in London, a TMT conference. Yes, very happy if you would join one of our meetings. I hope to see you there. Have a great day, rest of the summer, and bye-bye.

[Operator]

With that, that does conclude today's call. Thank you for your participation. You may now disconnect.