Earnings Call: Q1 2023

May 10, 2023

Good morning, ladies and gentlemen. Welcome to CSU Digital first quarter 2023 earnings call. This call is being recorded. Replay can be watched at the company's website, ri.csu.com.br. This presentation can also be downloaded. All participants can watch the participants, but also follow the slides during the presentation. We will have a Q&A session and further instructions will be given then. I would like to remind you that this content will be presented in Portuguese. There is simultaneous interpretation into English. Please press the interpretation icon at the bottom right of your screen. Once you listen this presentation in English, it is possible by pressing the interpretation button present on the bottom right corner of the platform and choosing the language properly. Before we proceed, we would like to state that forward-looking statements are based on the company's beliefs and on current available information. These statements may involve risks and uncertainties because they involve future events that may therefore depend on circumstances that may or may not occur. Investors, analysts, and journalists may have to take into account that the economic outlook, the industry conditions may make these forward-looking statements differ materially from future results. Guilherme Rocha, CFO, and Mr. Pedro Alvarenga, an IR Director, and the entire IR team are available today with us. I would like to turn over to Mr. Pedro Alvarenga. Mr. Alvarenga, you have the floor. Good morning, everyone. It is a pleasure to talk to you, investors and everyone interested in keeping track of what the company has been doing. We will be focusing on our Q1 results, more specifically. Before I dive into the results, the company has gone through a very intense transformational period in the past three years, investing heavily to be more productive and to come up with solutions to the markets where we operate. I think it is important to have that recap, what we do, how we do it, and why. I think that everyone can be on the same page. Therefore, this is what the company has become after this journey. We always like to say that CSU is an infratech. We develop and offer technology for the financial services world. We operate in the B2B2C arena. All the technology allows all the companies to provide their end users the state-of-the-art technology, offering a comprehensive offer of services. Customers always have the choice to use the full suite of products or the entire platform, but they can pick and choose specific modules throughout the architecture. We offer that possibility through APIs, and they will pick and choose depending on their specific needs. The second item here, which is very interesting too, is they always maintain the use of their own brands. We provide the services using the white label logic, so their brands will always be on the forefront. By doing so, we have always been willing to help our customers to operate the platform and provide high-value services to their end users so they can count on our entire technical support. On top of security and infrastructure, a robust infrastructure, they can therefore have or explore new revenue sources. These are companies that are not directly related to the financial services world, but by providing that offer, they can get even closer to their consumer to generate more revenue streams, generate more interest, cross-selling, up-selling opportunities, but most of all, increasing that customer loyalty given that better perception that customers have. CSU has been in the market for over 30 years. We have over 40. There are 44 B2B customers. It's an interesting volume of units, accounts, and cards registered in our platforms, above 34 million users. That is very relevant because it can bring more and more volumes in terms of transactions. We have over 900 million transactions processed in the past 12 months. The TPV of 280 billion BRL, that's a very relevant figure. Let me break down what we do in terms of products. I always like to start with this slide because it shows how we operate and what we offer at the end of the day. On your left, you see CSU Pays. We have an entire suite of technological products for financial services, payment methods, Bank-as-a-Service, loyalty, and incentive. On your right, that's what we call DX, the digital experience. Just like as I was saying before, on top of offering the entire technology infrastructure, we help customers execute their own strategies. That's where customer experience comes in, service, engagement, and relationship with end users. Very soon, we'll have several solutions for the entire process automation. That's what we call middle office. Let me now describe each segment. Payment methods, that's where we started. We can ensure and offer an entire package of full service for those customers that want to offer payment means or payment methods to their own customers. We have a complete suite credit card portfolio, including plastic cards, virtual, digital wallet, always connected to other payment platforms, including Apple Pay. We have the entire portfolio for quite some time. Everything's inserted in our ecosystems. We've now given the option of paying by Pix, P-I-X, and Pix on credit. Bank-as-a-Service, one of the projects that received our focus in the past three years, it's now becoming operational. Still in the soft launch model, we have been introducing solutions gradually with some customers. We offer that complete technology solution for digital accounts. Again, customers can offer an entire package through an app, or if they have some sort of internal solution, they may add some of our solution using our API. The loyalty and incentive world, we provide the entire infrastructure to manage loyalty programs so that they can extract more engagement, especially through financial services using coins and cash back systems. We set up marketplace. The points accrual system is established, and we give them an end-to-end solution. As far as customer experience goes, digitalization is key, especially in recent years. We have introduced self-service mechanisms using robots, chat robots, so that we can provide that quality perception right there in the front line to end users, providing economies of scale for both us and our customers. middle office. It's our priority for the year. We can ensure automation of each step of the way in hiring and contracting financial services using payment methods or Bank-as-a-Service. You have interchange, fraud prevention, onboarding, curation. All these mechanisms are available to our customers. On to the next slide. This is our customer base and how it evolved throughout the years. Year after year, the company has been bringing more and more customers to its base from several industries. It's a very diversified industry, banking, financial services, retail, consumption, among other industries that are part of our portfolio. That gives us more and more opportunities to expand. That gives us predictability as far as our results go, depending on the financial cycle of one industry, since we are very diversified in terms of customers and industries. That gives us more sustainability in our results. In Q1, I would like to point out that we have included two additional customers, Alice Technology and Vilela Brazil are now part of our portfolio. Both for Pays and DX verticals. Let me now address results more specifically. Here's what I would like to point out. CSU Pays remains the number one vertical of our company. That's one of the most important growth catalysts, and it becomes more and more strategic. Therefore, we have north of 34 million cards, almost 19 million can be billed. Our processing volume keeps growing substantially year-on-year. Growth is both in terms of number of transaction, an important metric to measure revenue trends and also number of cards, but not only the number of transactions but also when we talk about TPV, we are reaching the 20% a year. That means that we have been able to establish very robust relationships with our customers. They have been expanding their own operations, both in terms of number of users and number of transactions. We have been having that lasting growth in this vertical. As a reference, in Q1, we had a 14% expansion when compared to the first quarter of last year. Our performance remains very strong in this vertical. When you look at the chart on your right, that growth is sustainable. There are three important effects I would like to highlight when we talk about gross profit for that operation. We become more efficient in operating this product, given the digitalization of products, per se, plastic or virtual cards. These are products that are more profitable. Likewise, when we talk about processes, the company has digitalized most of its back-office processes that are part and parcel of this entire model that we operate in this ecosystem. That provides expressive profitability gains. This is a growing line. We start having gains of scale. in Q1, gross profit reached BRL 42 million, 16% above year-on-year. That explains that margin expansion. Let me now address our DX operation. This is the vertical that suffered the most transformation in recent months. We have been investing heavily in this area, trying to expand more and more the use of new tools for the service ecosystem. Self-service is one of them, RPA, chatbots, social media to establish that relationship with end users, and in the end, the more digital interactions there are, the more the quality or the higher the quality is, and at the same time, you can reduce costs. Most of those changes we've seen in revenue is directly related to the digitalization process itself, and we are investing more and more in new solutions. We'll see that in more detail shortly, especially when we talk about middle office, where we have been investing more and more. The most important aspect is that that transformation is happening in a very healthy fashion. We have been focusing on more added value processes to speed up our profitability and expand the brand. As you can see, despite those periods of more pressure in terms of top line, that does not translate into gross profit. For every transaction, every interaction we manage in our platforms, we can generate more reals per unit. As a consequence, gross margin goes up 1.8 percentage points rather. I'll turn over to Guilherme. He'll be giving you more detail on the results. Thank you, Pedro. It's a pleasure to be talking to you once again. Given this dynamics that Pedro has just explained, on your right, on your top right, you can see company revenues in Q1, almost BRL 133 million, slightly above numbers of last year in the same period. It's important every beginning of the year there's some seasonality involved in our industry and in the industries of our customers. That explains that variation, a slightly downward trend. We see customers somewhat conservative, especially in retail, though this happens across the board, especially when it comes to hiring new services. That's why that seasonality effect was greater this quarter. But the most important thing, just like Pedro said, is the digitalization of our services. This has been happening very heavily. At Pays, it's very mature. It's been going on for years. But in the case of DX, it's concentrated in recent quarters, and especially the last six months. That reflects on the indicator that Pedro has just mentioned, which is the number of digitalized interactions reaching north of 60%. You have self-service above 10%, too. That is very positive results. And of course, that generates, just like in Pays in the past, we've been saying that quarter after quarter, that reduces top line, but provides a very positive effect in terms of profitability and sustainability, more importantly. After all, especially during economic slumps, I think it's important to point out hyper-automation solutions being developed in the business area of DX. The focus here is purely efficiency gains, especially in middle office. This is something that we've noticed with adherence above expectations, and there's a strong demand from the market to hire these solutions. There's a lot of technology embarked involving machine learning, AI, processes that require less and less human interaction. For that same reason, they can provide better contribution in terms of results. These growth avenues have been opening up, and that's very interesting for the company, specifically for the DX unit. At the same time, at the bottom, we can see a trend that's been going on in recent quarters. I'm referring to the increase of Pays participation in the relevance mix. It's up by 7 percentage points when compared to 2022, from 56% to 63%. The impact in results is very positive. Moving on. The economy now requires efficiency more and more now, and this is something we've been delivering for quite some time. That can be seen in the variation and the evolution of our results lines. In all of them, gross profit, EBITDA, or even net income, no matter what index you look at, we've seen variations ever since 2018. A two-digit CAGR is almost 19% for gross profit in the same period. When we compare year-on-year, over 11% Q1 2023 to Q1 2022. The same thing applies to the company's EBITDA. I would like to point out the effects of our net income, our bottom line, over 30% variation. CAGR, almost 22.5% or 22.4% when we compare numbers from 2018 to 2022. This entire digital transformation, and we have been harping on it quarter after quarter. I think it's important to mention it once again, that this provides very significant benefits in the company's results. As a consequence of this improvement in our results, we have been showing evolution in operational generation. I would like to draw your attention to the top left corner, almost BRL 37 million of cash generation in the quarter, 7% above year-on-year. That, of course, impacts the cash equivalents, about BRL 80 million. I think it's important to say that this cash generation, on top of the impact and the availability level, these resources can be applied not only in the maintenance of a high level of investments, but also dividend distribution, as you can see on the bottom left chart, showing the variation in the quarter. Also on the right, in the last 12 months, we have been able to invest above BRL 56 million, dividends north of BRL 37 million, and debt settlements, and reducing the company's leverage with no significant impact on cash availability. Once again, cash generation. Let's break that down and see its effects, especially when it comes to debt, BRL 94 million, our gross debt. On the top left, you can see the schedule, the amortization schedule. Two-thirds of that debt will mature long-term, above a year. Along the same lines, its behavior throughout time is something that is also worth mentioning. Our leverage is zero now. Net debt EBITDA ratio is almost zero. 0.08 actually, times our EBITDA. This is for gross debt. I think it's important to be reminded that the gross debt with IFRS 16, that will include leasing contracts. When you take into account gross debt and look at when comparing to onerous debt, this has been going down. Q1 of 2023, we are at BRL 13.4 million, 75% below Q1 of 2019. In practical terms, net cash, when we compare cash availabilities when compared to onerous debt, almost BRL 70 million in cash for that period. Now looking into further detail, investments. Q1 of 2013, the company invested almost BRL 13 million, heavily concentrated in the Pays division. I think it is important to say an increase in investments in DX, once again, reflecting our search for more technological solutions and hyper-automation solutions as well. Anyway, 95% of the company's investments were focused to technology, developing solutions and the infrastructure technology, or the technology infrastructure rather. Likewise, just like cash generation allows us to maintain high investment levels, the company can also maintain that high level of dividends distribution, allowing high returns for investors or shareholders. In the first quarter, we have already distributed BRL 6 million through JCP. There was a change in payments. These dividends will be paid out in the same quarter once the decision was made. In the past, the company would pay dividends just once a year. Once the decision was made, the payments would be made out in the following fiscal year. As of this year now, we have distributed JCP that has already been decided in the first quarter. We did that in April. The compensation strategies for shareholders has become even more attractive. I will turn back the floor to Pedro. Before we conclude, let me just comment on this slide. This shows the relevant results the company has been able to deliver. The combination of this growth in both volumes and profitability, as we said before, this has been giving us a very prominent position when we talk about indicators of return on invested capital, return on equity. Even when we compare the company to top players in related industry and also those abroad, taking the American market as a benchmark, our return rates is substantially bigger than any of other companies. Just like Guilherme said, we have been maintaining that practice to distribute dividends, a very interesting and very attractive practice. We have been returning part of that profit to shareholders, and those levels are also well above market averages. When we look at the pricing of our shares comparing to the same players, there is some differences, there is some discrepancies there in terms of return and value. Let me point that out. If you take that EV/revenue, and the same thing, enterprise value over EBITDA, we are four times below average. When we talk about EBITDA, it is five times. If you take the top layer, that distance is even bigger. I think it is important to identify how much we have evolved in terms of results. We have been talking to investors more directly to clarify any questions they may have about our results and about our operation overall. On to our closing remarks. Six highlights for the quarter. Scale, digitalization, and portfolio synergy are becoming more and more relevant for our results. We have become a very integrated operation for each one of those products and each one of those verticals. We want to promote the logic of full service more and more. This has allowed us to grow very quickly when you take into account profitability indicators. Robustness of our infrastructure provides us with that competitive advantage in the marketplace. It has helped us have a more favorable position amidst commercial turmoil. Companies are going through difficulties. I am referring not only the robustness in infrastructure, but also its financial structure is very robust. We have been able to keep on investing heavily, allowing us to introduce new solutions. The Bank-as-a-Service as a soft launch in the quarter was a highlight. Pay methods in several other resources, providing us with more revenue streams. We have been working with DX closely to incorporate new solutions and expand sales even further. Despite these investments, the company has been able to be very attractive for investors. We have distributed 30% of our profits in the first quarter as JCP. We paid that out back in April. Now, once again, I would like to point out high profitability rates for the company with that asymmetry when we talk about value and compared to related competitors. I think we can now move on to the Q&A session. We are available to clarify any questions you may have. We will now have our Q&A session. To ask a question, please click on the Raise Hand icon. If you want to submit your question in writing, please state your name and the company you work for in the Q&A box. Bernardo Guttmann from XP Investments asks the first question. You talked about the soft launch of Bank-as-a-Service. What is this project all about? What is the potential of this customer, and what are your expectations for the business in the year? 60 Plus Bank was a contract signed back in April. We are going to provide the entire banking service to a player that will start operations in northeastern Brazil. It is a niche digital bank for individuals that are over 60 years of age. This is an audience that requires a lot of attention. You have a challenge to combine the best of the physical and the digital worlds. So it is a very interesting project that enables us to operate in the Bank-as-a-Service. Still in the soft launch approach, they have gradual growth expectations for the first year. We do not expect a major impact for the year, therefore. There are high expectations to expand in northeastern Brazil, taking Recife, Fortaleza, among other cities in northeastern Brazil. So there are some positive expectations for growth, but it is more of a symbolic customer, and it is a landmark, especially at the start of this operation. So we are opening up for new interesting possibilities as of now. I think your answer is very complete, but if I may, I would like to add that there is the possibility to expand to other areas, and it is actually the realization of this new route that is going to be very positive for the company in the short term. Alexandre asks the next question. You can speak into the mic, sir, please. Thank you, Guilherme and Pedro. Congratulations on your results. Can you elaborate on the hyper-automation of processes? What is that product like? What are the revenue and results expectations? The last table you showed, just like you said, Pedro, your comparison with your peers. What is the buy-side point of view? What do they say about this major discount? I think it is interesting to understand the point of view of the buy side as well. Thank you, Alex. That is a very interesting question. The hyper-automation solution, it is closely related to a BPO offer. Let me try to explain that. Almost any company that operates in this industry with a lot of regulation, with a lot of complexity, they suffer an enormous pain. They have to deal with several platforms, legacy platforms that do not often talk to each other, and they generate highly manual processes that are complex and expensive. I am talking about back office in the financial industry. We have exchange activities, document handling, onboarding inconsistencies, documentation in the medical industry, several documents and processes in the insurance businesses. There are so many pains for these highly regulated industries, and we have been very present in these industries. These solutions can actually remove many process-related inefficiencies, especially in the middle office, this mid-layer that is so important to these industries. There are actually two very important aspects. Digitalization will be operating right there. It not only generates a huge cost reduction opportunity because these processes are expensive. They are highly complex, manual interactions that are very intense. You can also improve the quality dramatically, because when you talk about manual interaction, of course, errors are involved. When you digitalize that process to a certain extent, you can bring in automation in those processes, and therefore you reduce the number of errors. That is crazy. You reduce process times. That improves the perception of consumers and that lag that there is when you have to deal with back office, that will impact their own end users. Of course, it improves the level of correctness. We add on a technology platform that can combine all these legacy systems and automatically solve whatever can be solved through AI or by simply digitalizing the process. You address the last mile problem. Even the manual labor that still exists in the last mile, it is way more optimized because the information has been organized before. Then AI can organize information, and then it will be manually dealt with in the last mile. Efficiency gains are huge. We have seen that happen internally. CSU has operated in these industries that are very regulated, they are critical, they are very complex. We have been doing this for quite some time. We have used that type of solution before. We did that in our own middle office when we operate as business as usual. What we see now is that this entire know-how that we have developed internally has a huge value in the marketplace, and adherence levels are crazy. Even the rollout of this type of solution to new industries is exactly what excites us the most in terms of growth avenues and adherence. Because we didn't even imagine that this demand would be so high. We're very excited about it. Let me piggyback on your second question. But first of all, thank you for attending our call. Let me address the asymmetry issue when we talk about share values or share prices and what we have delivered as far as results go. So here's my take, and I'm speaking on behalf of the entire leadership team. Just like I said, we've gone through major changes in our business in recent years. We basically transformed the business, bringing in a lot of tools, a lot of the digitalization, aiming at more productivity, more results, more profit, more cash generation. At the same time, we have been investing a lot, over BRL 150 million in technology alone. So we have been investing heavily in adding new skills, products, and services. Here's what we see. When you take the past year and a half or two years, the market has been very skeptical about technology companies because there was that major concern. Companies that were burning cash with no breakeven predictability whatsoever. That has hurt almost all companies in this segment. At the end of the day, CSU was involved in that group, was deemed a small caps company, a technology company, and of course, that concern spread to us, as far as our results generation capabilities, especially because our business plan had a lot of new elements. We oftentimes hear from buy-side analysts and also sell-side analysts, they say, "When you announced that new plan, I was skeptical. These guys are going to burn a lot of cash to execute." It was quite the opposite that happened. The company is at its best time ever. We show that we can execute. It shows that we have a lot of financial discipline of our executives, and the message is clear. Yes, we're going to make the necessary investments and at the same time, respecting the results generation capabilities that the company has. When you have something and you transform that into something way more profitable, it's key to us. That's what enables that strategic change by adding new products. Of course, it shows how surgical we are when it comes to executing our activities. There was that time in which the market was concerned, but we show them the opposite. We can execute that transformation plan and at the same time generate more and more results. A transformation plan with sustainability, right? Sustainability and consistency. Quarter after quarter, we have been investing, yes, transforming, yes, but at the same time delivering results. CSU is a case of efficiency for quite some time now and very sustainably. We see the company keeping that pace. Everything is done with a lot of responsibility. Efficiency gains is something that we're always striving for, both internally and also for our own customers, which in the end will help us in return. Our number one asset may be that generation of benefits and competitiveness to our customers and grow with them. These are very important pillars. We have adhered to for quite some time. We're not a company for the future. We are a company of the present. We deliver results, and it's been growing. Not every company can grow at 30% time and time again. Very few companies can triple their cash generation in so little time. That market concern is dwindling quarter after quarter. We have proven that we can execute our strategies. We have been working hard internally. We've been getting support from people like you that help us get closer to the market to remove that asymmetry. It's a matter of education. That's why I like to talk about our thesis at the start of the call. The company is delivering results, and I still have a series of new initiatives that can even leverage that potential even further. I think it's clear our return rates are extraordinary when compared to the market, and that share price should be closer to what the market is paying for other related industries or to companies in other related industries. So it's a matter of building step by step, brick by brick. We have to keep on delivering results, something we've been doing consistently, and at the same time show that to the market. That's our number one challenge. Marco Barbosa, Mirae Asset, asks the next question. Good morning. Good morning, Guilherme and Pedro. Congratulations on your results. These are very satisfactory results. My question is about future investments. You see that you have good cash generation, good capital structure. Does it make sense to resort to acquisitions? What is the number one roadblock that prevents the company from resorting to acquisitions given its good capital structure? Is it interest rates? Is it a matter of organizational culture of the companies that could be acquired, or is it because there are no opportunities and it doesn't make any sense, and you would rather resort to organic growth only? Thank you, Marco. It's a very complex question, but it's a good question nonetheless. Let me try to address that in different ways. In a recent past, the valuation of potential targets for M&A had no foundation, no matter what type of analysis you conducted. We would like to make that very clear. Number one, it has to make sense from the business perspective, both in terms of resources being invested in that acquisition and at the same time the benefit that acquisition can provide, either by adding it to our suite of services or maybe because of a top-line contribution or bottom-line contribution. The financial logic was not there. We considered potential targets with valuation levels that did not make sense, and the market ended up proving we were right. These valuations are being adjusted substantially, and now they're converging to more reasonable levels. Now on to the second criterion. It has to make sense. It has to add some value, not only from the capital markets logic, but the actual added value to the company. In terms of solutions, we've seen that several cases we considered when we took a deep dive of the quality of the solution, internal development, or even the solution that we had was better in terms of development structure or technology structure when compared to potential acquisition targets. Again, it's not a matter of a cultural difference. We want to add as much value as possible to the company, and as a consequence to the company's shareholder. It doesn't make to resort to an acquisition for acquisition per se, and bringing in more top line that may hurt the bottom line by burning a lot of cash, even when you improve efficiency, which can make sense in several instances. But up until now, we haven't found any interesting opportunities out there, and we looked around. Some are still in our radar. Anyway, what's key is that inorganic growth is not to be disconsidered, or it's still under consideration, of course. But we've said that time and time again, we have to be responsible in any decision we make. We have to be careful enough to make sure we are actually adding value to the company. Again, we're not doing that just to make some impact in capital markets, but we want something that can actually add value. Thank you. Congratulations once again. Thank you. Enrique Vasconcelos asks the following question: "Guilherme Rocha, Pedro Alvarenga, congratulations. Can you elaborate on expected revenues for DX for the rest of the year? Do you believe that middle office can help the segment go back to a growing trend? DX has some important components there, as far as revenue is concerned. Again, we have gone through that transformational change or period, especially when we talk about the digital world and services. In practical terms, you replace a more expensive revenue from the customer's point of view to a cheaper solution, but way more efficient and with a lot of more quality. So that replacement has been taking place on a regular basis. Just last year, self-service and automated transactions from 67, we are now at 73 in Q1 alone. So the impact is significant on that line, especially when you take into account the top line. But as a consequence, we have been able to maintain gross profit, gross margins, and our gross profitability as a consequence. This is important internally and also for the market. Seasonality is yet another important item. The first quarter is usually the worst quarter of the year, so that is why we expect better results for the rest of the year. On the other hand, we have to pay close attention to the long term. That is what we have been doing for quite some time. What are the major components? Macroeconomics, interest rates, inflation rates, everything will impact our business. The market is more conservative the way we see it, especially at the start of the year. Many companies are concerned about the macroeconomic situation, both in Brazil and abroad. Geopolitical crises, higher inflation rates, higher interest rates throughout the world, and we see companies taking a more conservative approach. But this service world will keep on transforming itself, becoming more and more digitalized. There are important projects currently underway, but there are many uncertainties, many question marks as to how this dynamic will play out throughout the years. When we talk about middle office, things change. That area may surprise us all. It is a completely new product, and it is supplied to 100% of our customers, those that are already in our customer base or those that we have been talking to for quite some time. We knew already that this was going to be an important area that can bring a different level of dynamism. But customers are also positively surprised with the possibility of using these solutions for their processes. Again, I believe that the middle-office solution can contribute substantially as these products are introduced. Let me remind you of one thing, Enrique Vasconcelos, the middle-office solution will be delivered in tranches. We are not waiting for its complete 100%. We'll be gradually introducing interchange, curator services, and so on and so forth. We can speed things up gradually. I think it's important to mention that since we have that used internally, the rollout to other industries is a little easier. Just like Pedro said, it can keep on adding contribution exponentially growing with gradual adoption and somewhat speedy adoption, if I may. These are solutions that can complement each other. The middle-office solutions, it's an interesting growth avenue, and to a certain extent, they can gradually replace processes that we're already providing our customers, but they're more manual, especially because of their own legacy system. As we include these solutions, you can replace top-line sources. It's important. It's a digital transformation movement. It's only natural. Results are very positive to the company because we can improve our margins. The outlook is not an economic resumption per se, but there will be traction for DX because of these new growth avenues. At the same time, the digital transformation, because as it evolves, it also replaces some services that are less technological in our top line. This is positive. This is healthy. We see that process as desirable, as a very beneficial process. There's more. Despite that skepticism earlier this year, we see a mood change already. The expectation for the second half, that will be stronger. The economy may pick up a little, especially for some industries where we do have customers. This can become a positive factor, not only in new fronts, but also in the traditional ones as well. This concludes the Q&A session. I'll turn over the floor to Mr. Alvarenga for his closing remarks. Once again, thank you for attending our earnings call. It was a huge pleasure to talk to you today. Myself, Guilherme, the entire IR team, we're all available to answer any questions you may have. Thank you, and have all a great 2023. Thank you. See you next time. This concludes CSU Digital Earnings Call. Thank you for attending and have a great day.