Earnings Call: Q1 2024

May 9, 2024

Good morning, ladies and gentlemen. Welcome to the CSU Digital video conference to discuss our results for the first quarter of 2024. This video conference is being recorded and can be replayed on our website, ri.csu.com.br, and the presentation is also available for download. Please be advised that all participants can not only watch the speakers, but also follow the slide presentation. We will then initiate the Q&A session when further instructions will be provided. I'd like to remind you that the presentations will be made in Portuguese with simultaneous translation into English. Those who wish to listen to the English audio can toggle the language using the interpretation button located at the bottom right of the platform. That don't speak Portuguese and want to listen to this presentation in English, it's possible by pressing the interpretation button. If you want to listen to the English audio, you can select English at the lower right-hand corner of the platform. Before we proceed, I'd like to take this opportunity to say that forward-looking statements are based on the beliefs and assumptions of CSU Digital's management and on current information available to the company. Those statements may involve risks and uncertainties as they refer to future events, and therefore, depend on circumstances that may or may not occur. Investors, analysts, and journalists should bear in mind that events related to the macroeconomic environment, to the segment, and to other factors may cause results to materially differ from those expressed in the relevant forward-looking statements. Present in this video conference are me, Mr. Pedro Alvarenga, CFO and Chief Investment Relations Officer, Mr. Fabiano Bragatti, COO and CTO, and the IR team. Without further ado, I now give the floor to Mr. Fabiano Bragatti, who will initiate the presentation. Fabiano, you have the floor. Thank you. Good morning, everyone. It's a pleasure to be here today with you to discuss our results and what we have been doing in the last few months. In this world now so infused with dopamine, it's important for us to find time to discuss our results with you. Beginning on a very macro level, and I will soon give the floor back to Pedro for him to discuss our financial results. Just to recap, that our business model is very much focused on pioneerism since the creation of the company in 1992. We seek to democratize technology, to democratize the complexity that the payment method systems involve, so that companies can use those products to provide better services for the public in general, to provide a better payment experience. This pioneerism has brought us here and helped us keep us on our toes, always focusing on innovation, on technology that will allow us to offer new products, to provide services to our clients. Looking at this image that you see there about a card payment experience, it shows very well our full service model. We provide services since the very beginning of a proposal to a client that will offer cards or a benefit card, a payment card, going through all steps, covering its full life cycle, validation of the credit, processing payments, so that the client can provide a good purchase experience, identifying potential frauds, helping keep the whole payment ecosystem afloat, taking care of the full experience of the client, always looking in-house, especially in the middle and back office processes. How can they occur digitally so that they are nimble, efficient, so that they will actually provide value for the clients and will solve the client's problems. Of course, we are very much focused on accountability. Everything is regulated, so it is important that we provide the information to not only government authorities, to accounting offices, auditors, et cetera. It is very important for us to provide accurate information. When some client has failed to pay, it is important that we can access the client and provide some payment options. So the whole life cycle involved, it is important that we can cover it in a seamless way. This is our vision, to provide, to deliver a full service, even if it is composed of different modules, so that we are very much focused on providing services through APIs, which allow us to work in modules. We are always very much concerned that we provide a client, the card issuer, the acquirer, a full service through our platform. This pioneerism, this integration of our services, it is our differential. It is what we have to offer to the market as unique services. Moving ahead, looking here at the interest of potential clients, looking forward, we see ourselves addressing a new market that was not included in our typical, as it were, portfolio. When you look at the DX vertical, we end up to focus not only on the client's experience, ever more digitalizing that experience, which is what the market wants, through chats, et cetera, that was already in place. But we made a more significant leap forward using artificial intelligence and associate technologies and methods. So that automation of the process, that is why we refer to the product as HAS hyperautomation. This puts us in a unique position in the market, so that we are not only serving our traditional market and clients, we are now opening door to a new market because we see their platform as providing a potential to improve and digitalize services that very often were provided manually or semi-automatically. This provides a significant impact for our final clients. This is our objective here, to offer those new services and include them in our portfolio. But of course, we cannot forget our more traditional portfolio, where a significant portion of our results come from through loyalty programs, digital methods, financial services, embedded services which offer our clients a unique service to the target market that our clients serve. So that our portfolio is fully integrated and we can deliver to the client something which will actually digitalize payments and to the service that the client provides to their clients. It is no longer something new to use today, a digital wallet. So those things which are not necessarily breaking news, still provide challenges in terms of its implementation and management. The market never stops, so things constantly change and we are always seeking to facilitate the payment experience. So our fully integrated portfolio provides that sort of service and offers a very complete and transparent solution to whoever uses our services. We've also have been including new services, of course, for instance, the Pix electronic transfer of funds method. We use, for instance, Pix on credit. We have been focusing on sub-segments. As the central bank expands Pix coverage, we include different sub-services in our portfolio so that we can always provide different options for the final client to provide services to the market. As I said earlier, since the initial digitalization, and including everything on our platforms, we are at the forefront with very important partners in the market, technology companies, so that we can operate the most efficient way using those new technologies. We see very interesting results, which we will discuss later on, in terms of the generation of value. We see this not only in our results, in our figures that Pedro Alvarenga will discuss, but also in some quality indicators, which are very significant for our position in the market. Competition tends to be fierce in the financial market, and we offer to our clients unique services that will help put those clients in a very comfortable, competitive position. I think this is very important for all of us. When we talk about the provision of a full solution such as this one, we're talking about digitalization of the whole life cycle of the product, from the client onboarding until the final contact of the payment of the bills, or even a negotiation in case of non-payments. We've had very positive experiences using IA in that sense. Some of those experiences have been integrated into our service, and we will discuss this later on. Let's now move on to the next page. Talking about technology, which is really my focus. You see here in schematic drawing, showing how we designed the architecture of our systems, so that they could, on the one hand, be fully integrated using cutting-edge technology to provide the services included in each vertical. On the other hand, so that it could be also structured in a moduled way, so that the client can choose the specific services that the client finds interesting. I think it's important for us because it helps us provide a robust integration platform, and it helps for us to integrate data and to process data within the whole ecosystem, including from partner financial companies to companies that operate with cryptocurrencies, which we have already included in our system using several channels, voice, data, files, API, every sort of channel. WhatsApp, we use very often in our interactions with the end customer. All of that provides us to offer a multi-country, multi-currency, multi-product platform. So this multi everything, the purpose of that is exactly so that we can offer a wide range menu of services to our clients. This creates a volume of data which is very significant and rich. This shows us the behavior of a consumer in a certain region, for instance. We use that wealth of information to the benefit of our clients to provide insights, changes that we can propose to some products, what the market is demanding so that we can assertively propose solutions to the clients. One of the insights that we found is exactly that, sorry, that the hyperautomation can be used to digitalize also the back office systems and all processes which are in-house. That hyperautomation applied to the operation has given us excellent benefits. Other than that, we shouldn't forget digital services used to analyze data and to provide insights from machine learning so that we can extend those benefits and that information to the client in support of the client's decision-making process. We're very proud to say that our platform is 100% operational and it has three characteristics which I think are key to any provider of digital services. First, stability. A platform that supports a full-time, 7-day-a-week critical service has, of course, to be operating because any failures will affect the final consumer or the final clients who will not be able to use an important financial service. Then number 2, scalability, which is also a critical key thing. Commemorative dates usually provide a volume of transactions that sometimes exceeds that of the whole rest of the month. The fact that we can quickly scale up our transactions is key so that we can fully support the transactions of our clients. The market is very dynamic. We see that. Pedro will discuss operating information later on, and you will see our constant growth. Technology platforms must be ready to support that. The third point I'd like to mention is the fact that our platform is fully integrated using APIs. This may seem technical, but at the end of the day, it opens the possibility for the client to customize their final products. What they will offer to their clients, which they think will be more important to their clients. This is absolutely key. The fact that our platform can be adapted and can mold to the need of a certain client, at the same time that it adapts to a different client that have very different needs, providing the stability and the scale that I just mentioned, I think this is very significant. Those three components, without a doubt, are key for our success. Next page, please. Quickly mentioning our results. I just spoke about our automated processes using artificial intelligence. We see here some actual information from our clients. We see here, especially the fraud prevention and integration of different networks. Those are very common in our markets which involves significant volumes. Since early on when we began doing this, we saw very positive results. We've been using more advanced solutions, but we expect those results to become even more significant. I'd like to focus on one, the fact that we reduced operating errors by 95%. It's something which is extremely valuable. Why? Because this translates in experience. The experience to the end client, which will enjoy a better, faster service. We're ever less patient. It's important that our services are provided in a very accurate way. Of course, the productivity gain will also enhance the economic efficiency of the market, of the transaction of the process, which is very important in such a competitive market. Here I'd like to focus on this reduction of errors, which I think is something of superlative importance in terms of the quality of our services. As I said, this application, we're talking about an actual case. But it goes much beyond this in the payments markets. We hopefully will have very good news for you soon, not only for the payment means in financial markets, but also for retail, utilities, and insurance. We see those markets as very, very attractive. If you look down there at the description of the processes we've been focusing on, you'll see the repetitions there. Of course, there are different characteristics in each of those markets. You see that at their core, they're very similar. We note that we can very much leverage our operation, focusing on hyperautomation, providing great benefit for our clients and, of course, better results for us here at CSU. Pedro will discuss our figures, our results, which are very positive. I think you will now be very happy with what you're going to see. Pedro, you have the floor now. Thank you, Fabiano. Good morning, everyone. It's a pleasure to be here today, again, to discuss our results for the first quarter. Just segue from what Fabiano just said, I think that CSU is a company that through the years has gone through an expansion, a growth, a transformation process. It's, in my opinion, very often we look at the cold figures, which in our case are very positive. For us who are here inside the company, we know how significant this transition has been for a business. For us to imagine that payment means that until then were a, shall we say, a static product, because the end user has already taken the decision to buy something, and then he or she is going to use that method, that payment means just to pay for that product. Now that becomes something much bigger, thanks to the information, the data that it's generating. Everything is used to enhance growth, to approve transactions. We think that the experience, it was difficult to think years ago that the experience of the end user could be transformed not only at the end but also throughout the whole process, the whole cycle, thanks to digitization and also very much in what the user sometimes does not see, the back office, the support structure, which are day in, day out, processing documents, reviewing potential risks of fraud. Sometimes for the end user, this is not visible at first, but when some problem springs up, then, of course, the pain occurs for all of us consumers. This is a very important cycle for the industry, and CSU prepared to be able to spearhead that change and to be a heavy user or agent of innovation in the market. Let's look now not only about the future but what actually happens. Let's go through our indication, through our operating and financial indicators along this presentation. The first thing I'd like to say about our first quarter results is that CSU has been growing consistently year in, year out. As observed earlier, we went through a very significant cycle of transformation within the industry with heavy digitalization. Everything which is done, cards stopped being issued physically in plastic. Now they're virtual. Processes, service, customer relations were 100% human. Now they are automized as far as possible in using human capacity for that which cannot be digitalized. Everything is being transformed. I think that the end result is that our company has been generating significantly higher volumes of different businesses. This, of course, allow us to consistently, repeatedly, every year, show a very consistent result, despite an environment in which, because digital services are cheaper and more efficient for our clients, even in that scenario, we have been able to continuously grow our operations and even better to see our annual revenues growing. We closed the first quarter at a bit over BRL 139 million in net revenues, growth about 5% in relation to last year. I would like to draw your attention to a significant portion of that growth came from our core business, which is CSU Pays, which has been gaining ground in terms of representative in the whole. Now representing 65% of the total. I will discuss each vertical individually because they are going through very different dynamics in terms of growth and profitability. But I would like to highlight the fact that each business is providing a positive contribution, and CSU Pays was benefited from a very robust growth of the financial industry. So it has been growing faster than CSU DX. Now, looking at each business vertical individual, CSU Pays, new components were added, new products were added to that vertical, and that explains a very significant growth that we saw in that vertical in every metric, both operational and financial. We closed the first quarter of 2024 with a bit more than 37 million direct users registered, which somehow will indirectly use our platforms, the CSU Pays platforms. That growth was 9% in relation to the first quarter of last year, showing that the industry has been creating new ecosystems which manage to attract new consumers and users, offering both niche and wider solutions for each customer. But not only from the perspective of the user, the beauty of our business model, of our full service model, as Mr. Fabiano Bragatti very well explained, is that from the same user base, we can generate new sales. Because often a user that, for instance, uses only cards, then we offer other types of transactions. For instance, a purchase through a marketplace which is embedded in another solution. We can offer, for instance, point programs for that company to use, and we can manage those loyalty programs, and of course, those end users will use those points to obtain benefits. There are multiple vectors which our company uses to generate higher volumes of transactions for our business. I think this is the great beauty of our successful model. Regardless of what happens in terms of the quantity of users, we continue to grow, to show even greater growth in terms of volume of transactions and the payment volume seen in our platform. All of that, combined with an accelerated and consistent growth in our annual revenues, which have allowed us to provide the results that we mentioned earlier. I would also like to stress that a significant portion of that growth came from our new products, which are considered purely digital products. If we manage to see 8% growth in this vertical's overall revenues, in terms of the purely digital growth, purely digital programs, the growth was 11%. That the driver of our growth in this expansion cycle, it is very well-grounded, and it operates as a driver of growth for our vertical. Last thing I would like to say about CSU Pays is that this growth that we discussed, it occurs much more efficiently than 4 or 5 years ago. Because when we are talking about digitalization, we are not focusing only about the product, we are also talking about the digitalization of processes. The management of a process, the exchange of information, the prevention of fraud, et cetera, in an environment which it is digital from its inception, the whole thing is much more efficient, which explains the profitability gains that we have been showing year in, year out. If you look at, say, a 5-year window, our gross income more than doubled, which means a growth of more than 20% per annum for the last few years for that vertical. If gross income is growing faster than revenues, this means that our profit margin is becoming higher, is growing. By the end of the quarter, it was more than 55%. That this vertical is providing better results for the company as a whole. Looking at the CSU DX operation, many of the effects that we see at CSU Pays, they also occur here, but in a different way. Our operations which went from the traditional service model where there would be people available to provide human services, human support to our clients. Now we use digital solutions such as bots. There are multiple solutions, digital solutions, which are used to manage front office operations, meaning the contact, immediate direct contact, front end contact with the end user. Now all those processes are heavily digitalized. We are talking about 73% of interactions occurring digitally in our business. Of course, when you do that movement, as said earlier, sometimes you have to sacrifice price because the operation will become more efficient and cheaper. But on the other hand, is that the result which is left for the company is much more healthier. Since last year, we have been able to maintain this volume, this rhythm of this level of digitalization around 70%, 73%, which causes our results to grow in a more stable way. The growth of this vertical has been around 6% in terms of growth. But looking at earlier time periods will show how intense this analog to digital movement was. We see here this movement very mature now, and we offer a product which is much more profitable looking in the same time window. We expanded the provision of services, and our margin increased by 4.4% from 0.7 percentage points. That is I think that the last comment that I would like to make about this vertical, and which is something which have been already observing with the market, is that we are at a frontier now. Our business, our service business was transformed and is now showing signs of stability, which allows us to, as the volume grows, we still see some growth in terms of revenue at a higher profitability level. But we decided to offer new solutions to include them in our portfolio. When we are talking about HAS, H-A-S, it is a key element of our growth strategy for that vertical because it is a completely new product which is very closely aligned to the reality of the businesses of our current customers, clients. It allows us to reduce costs and to make those processes more efficient, less error-prone. They become more time efficient. This offers a very significant benefit for the end user, for our clients, and of course, for CSU. That vertical shows a very significant potential in terms of revenue growth. Its profitability is even higher than what we see now. All of that combined allowed us to offer very significant profitability results this year. We were growing at 5%, 6% in terms of revenue. When we look at earnings, both gross and net income, growth has been much more significant through time. This is the result of that digitalization process that I mentioned. Our gross profits practically doubled. Our EBITDA is growing at a fast clip in this very short period of time, which means that our company is now a much healthier company that provides much better results for all of us and for its shareholders. Our profitability, in the same way, has been growing exponentially. We closed the first quarter of this year showing 16% growth in gross profits, 11% for EBITDA, 20% for net income. Our margins are 58%, 48%, and 24%. Those are very significant indicators in the context of our company at record levels. Our business model is geared so that in the end, we provide a technology and services, full services provide a platform to our clients. Our business is then very predictable. The scalability of our growth, our ability to scale up is very significant. Because we see this recurrence in our model, there is no misalignment between the generation of results and cash. In practice, every time that our result increases, we see a reflection of that in our capital structure. We are now cash-rich, and that is very much the result of the growth that we saw in our results in our cash flow. 85% of our EBITDA now automatically turns into cash. This allowed the company to delever. Currently, this is very significant given the current economic situation. We massively increased our technology investments. Of course, we are a company that is always very much geared on always innovating into adding solutions to our portfolio. Other than that, we were able to provide results which was enough to cover those investments and to provide a very significant profitability to our shareholders. We have already paid BRL 6.5 million from our result as interest on shareholders' equity. I would like to briefly summarize what we have discussed. CSU is a company that already provides very good results. We have very important projects which will create a significant expansion for us. We see very attractive opportunities, but it is important to stress that we already provide today very significant results. Those results, they tend to be supported not only by new solutions, but also by the efficient and massive use of data and intelligence. Not only from CSU Pays to increase the number of transactions, but also from HAS, which helps us to better manage the business processes of our clients. We expect this growth to be even more significant. Our balance sheet is very solid, as I said earlier, which is the result of a very significant, very strong generation of cash. This puts us in a very favorable, very positive position, which will allow us to continue this growth. We have already paid through the years BRL 215 million to our shareholders, so that we provide a very significant, very positive return to those who are and wish to be our shareholders. Last thing I'd like to comment is that this whole movement, this whole business transformation movement that the company did to capture new markets, to increase profitability, all of that, in some way, has not been fully absorbed by the market in terms of the price of our stock. CSU, our ROE today is around 22%, or the company is currently in average dividend at 9.7%, which is a very significant difference. In ROIC, the difference is even greater. We are at 21.7. The market is at a 7.1 average. And we're talking an average that includes different types of technology companies, both in Brazil and in the U.S. Similarly, the remuneration, the profitability that we offer to our shareholders, we're way ahead of market averages. But although the price of our stock has doubled, we're two to three times below the market's average, which shows that there is an asymmetry in terms of the perception of everything that the company has been doing and delivering along the last few years. You see here, this is something which we have been focusing on in the last few quarters. We're trying to address to somehow correct that asymmetry. There's a number of analysts, different institutions that cover our company. We maintain an intense schedule of meetings with the markets to attract not only individual, but also institutional investors. Institutional investors now represent 48% of our stockholders, and this somehow benefits the price of our stock. This is what I had to say. Thank you very much for your participation. Now we'll open the Q&A session. Thank you. We shall now begin the question and answer session for investors and analysts. If you wish to ask a question, simply click on the raise hand option at the bottom of your screen and wait for further instructions. Or if you wish to submit your question in writing, please enter your question, your name, and the company you represent in the Q&A box. Please wait. Nossa primeira pergunta veio de Bernardo Guttmann, da XP. Our first question comes from XP's Bernardo Guttmann. Do you see any imminent risk of a slowdown in the financial service market, which could impact CSU Pays due to market saturation of overlap between financial agents? Thank you. Thank you for your question, Bernardo. It's a pleasure to have you here with us today. In relation to saturation, the Brazilian payment market, the financial industry as a whole, has been going through a very significant growth cycle in the last few years. We saw very fast growth in terms of the number of the population that uses bank services. We went from more or less 65 million individuals who had some sort of interaction with the financial industry, and now we're at 190 million. So that growth, the size of the market is essentially tripled in a few years. Digital payments are now already the most used payment methods. Years ago, people would use cash, checks, and now we use Pix, credit cards, among other payment methods, are now dominant. But if you look at the details of those indicators, we still find the market not to be mature, strange as that may seem. The revolution occurred very much at the basis in terms of transactions. The number of digital accounts grew significantly, the number of digital payments grew very significantly. But the credit markets in other aspects, such as open finance, Pix on credit, which is just beginning. There is a number of different movements that began years ago, but they now are still very far away from being able to be deemed mature. Just to give you one example. Brazil today is the largest market in Latin America. Just to give you an example. Brazil represents about 25% of that market as a whole. But when we look from another angle, Brazil represents 35% of the Latin America's GDP. So you see there already a significant gap in terms of how much economic value we create and the volume of transactions that you see in the banking environment. This is an indication of how underdeveloped our market is. Looking at another angle, and still talking about banking as a service, is that the estimated potential for Brazil is BRL 16 billion in terms of accounts. I am not talking about credit. This is essentially extrapolating industries that operate banking as a service, vis-à-vis companies that not as yet use it or that use analog functions. So of that potential, only 20% was actually achieved. There is a chasm there in terms of the potential of that industry and what we actually see it doing now. To sum up, I think that those products are new. They are still going through a progressive ripening process. And as technologies become more mature, those products tend to evolve and they are still to show their full impact in those verticals. Innovation never stops. You see today the technology being used in different ways, so that the same transaction mechanism is used in Brazil or in other countries cross-border. You see, for instance, Drex, which is the regulated Brazilian digital currency. What I am really saying here is that companies will continue to create their financial ecosystems or cause their existing financial ecosystems to become more digital, and users will have greater and greater access to new products. That is why we see year in, year out our operational growth in terms of 20%, and we expect that growth to continue for the next few years because of all those new things that we see happening in the market. Just to complement, Mr. Pedro Alvarenga, we are not looking only at that market, that one you mentioned. We are also talking about new markets, new geographies, so that our strategy is not anchored only in our current position in the Brazilian market. Exactly, yes. Very much so. Our next question came from Mileni de Miranda. What growth do you expect in the next quarters in Pays? Will embedded finance provide new volume? And what about HAS for DX? That is an excellent question. In relation of growth for the next few quarters, as we have been saying in this presentation, we see a number of possibilities, including at a faster clip for the next quarters. CSU Pays grows repeatedly at an almost constant speed. That dynamic comes exactly from this moment in the market, but also from the very nature of the business. We are a platform-as-a-service company, so the client essentially engages us to manage a specific user base and a certain volume of transactions. Bearing all of that in mind, we see no reason for that dynamic to significantly change over time. It is a carryover model. The client will create a new project with us. It will begin small, then there is a setup, then it grows through time, and that user becomes used to that payment method and will use it more and more. Then you see this almost clockwork growth over the years. What may change significantly our growth dynamic as a whole is HAS, which comes from CSU DX. It is a product with a humongous growth potential because it is applied to several processes, to multiple businesses. As Fabiano said, we are not limited to sell to the companies and industries we already operate with. We now have a much wider range of potential businesses and clients. Not only in the financial sector, in banks, retails, but also other businesses such as utilities and pharmaceuticals. This opens us very important avenues for potential growth. I also like to add that we are talking about a hyperautomation process which is applied to existing processes. Companies already have on board certain processes. They have fraud prevention processes. Those processes are already there, but they are expensive, they are slow, they are error-prone, and we provide a solution for that. This will probably provide very significant extra volumes at very favorable profitability. I think that our company is going to continue showing this growth that we have seen, perhaps even at a faster rate. I think we will still continue to add percentage points to our margin thanks to the greater efficiency of the HAS, but also because of the scalability of our business. Once again, if you would like to ask questions through audio, just use the Q&A button. If you want to ask your questions in writing, just submit them using the same button. Next question from Bruno Rader. Good morning. First of all, congratulations on the results shown. Could you please elaborate on the internationalization of services, especially to the U.S., and what costs do you foresee for that? Could you also comment about the M&A trends for that industry? Okay, thank you for your question. We aim at initiating our operations in the U.S. in 2024. We are looking at establishing the partnerships that we need so that we have something on the ground working. In terms of cost, we feel that those investments will not be too great in terms that we are using the same platform to provide services abroad. We are ready to operate with this multi-currency, multi-language reality. We would have to adapt this or that in terms of legal reporting, different accounting systems. There's always some adjustments to make, but they will be one-off and not significant. We see very much more a front office investment for us to be able to access our clients, to provide sales services, et cetera. But in terms of the more significant operating core, I think we're essentially ready to address to serve all the markets. Adding to what Fabiano Bragatti said, this is something that involves a number of steps. And of course, we begin, and it's something which has to be done slowly. The potential of the U.S. market is gigantic. It's 10 to 15 times greater than the Brazilian market, and depending on at what year you look at or in terms of the number of institutions or the volume of transactions. It's a market which is not at all concentrated. It's very spread out in terms of the number of smaller financial agents, which opens the opportunity for us to compete, and it also demands more and more solutions that we already have in Brazil. Brazil, it tends to be at the forefront of that market, of the industry, because we're a very challenging market because of high inflation, because of the significant number of high volume of frauds. On the other hand, this makes us able to provide sophisticated solutions which are very much in demand in the U.S. market. We see that as a very significant possibility for growth in the next few years. But we have to address it slowly. We're already incurring some costs. To open an office, to hiring employees, some technology investments, licensing. Not necessarily directly, perhaps indirectly through partners. We're doing that step by step, so the costs tend to be small, very closely connected to this process that tends to be one-shot costs. We're not as yet creating recurring costs, but we are step by step, adding bricks to build this building, to put it up from the ground up so that we can gain traction very soon. As soon as we have the definitions that we need in terms of strategies, the targets, and how we're going to move with all of that, we'll of course disclose that to the market. In relation to M&A, this is an attractive possibility in terms of U.S. market, which can perhaps give us a significant time to market. For instance, to obtain the licenses to operate in the U.S. market, it's a very complex and slow process. Both on the side of creating channels, licensing, establishing your brand, or just perhaps on how to reach your clients. This is something which we are looking at attentively to those possibilities. But again, we are also very careful when we do that, because this would be a very significant movement for us, and we don't want to make any mistakes. We want to do this in the best possible way in terms of results and the potential for growth. We're very carefully looking at that, and if we do find an attractive asset at a convenient size and a convenient price, then we may, yes, follow that route. Again, to ask questions, please click on the raise hand option or enter your written question in the Q&A section using the same button. If there are no more questions, I'll now give the floor to Mr. Pedro Alvarenga for his final comments. Pedro, the floor is yours. I'd just like to thank you all for your participation. 2024 will be a very important year for us because of the possibilities that we see, thanks to the completion of several projects which were planned four or five years ago. Both myself and all our investor relations team, Fabiano too, are at your service if you want to ask any questions, if you want any further information. Thank you all for your participation, and goodbye. The CSU Digital video conference is now closed. Thank you for your participation, and goodbye.