Earnings Call: Q2 2020

Aug 18, 2020

Ladies and gentlemen, thank you for standing by, and welcome to Agora Inc. Second Quarter twenty twenty Financial Results. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. And I would now like to hand the conference over to your first speaker today, Fiona Chen. Thank you. Please go ahead. Thank you, operator. Good evening and good morning, everyone. My name is Fiona Chen. I am the Investor Relations Director at Agora. Thank you for joining Agora's second quarter twenty twenty earnings conference call. Joining me today are Tony Jiao, our Founder, Chairman and CEO and Ninging Bo, our CFO. Our earnings results press release and a slide deck can be found on our IR website at ir.agora.io. Reconciliations between our GAAP and the non GAAP results can be found in our earnings press release. During this call, we will make forward looking statements about our future financial performance and other future events and trends including guidance. These statements are only predictions that are based on what we believe today and actual results may differ materially. These forward looking statements are subject to risks, uncertainties, assumptions and other factors that could affect our financial results and the performance of our business and which we discuss in detail in our filings with SEC, including today's earnings press release and the risk factors and other information contained in the final prospectus relating to our initial public offering. EDGAR assumes no obligation to update any forward looking statements we may make on today's call. With that, let me turn it over to Tony. Thank you, Fiona. First, I'd like to thank you and welcome all of you for joining us today for our first earnings announcement as a public company. Before walking through our Q2 performance and highlights, please let me spend a few moments describing our business. As more aspects of our lives are moving online, there is tremendous demand for real time video engagement. Historically, user would need to install a dedicated app to use video engagement, such as Skype, FaceTime, or Zoom. However, in more and more cases, users are looking for contextual real time video engagement that is directly embedded in the application they are already using. Whether that is for education, dating, or game purpose, enabling richer context and more seamless and immersive user experience with no need to switch in between apps. This is exactly what we do. The GrowUp platform provides developers simple, flexible, and powerful application programming interfaces or ATI to embed real time video engagement experience into any application. Ultimately, our mission is to make real time engagement ubiquitous, allowing everyone to interact with anyone in an app anytime and anywhere. The key components of our platform are our software defined real time network or SBRTN and our software development kit or SDK. On top of the SDRTN and SDK, we offer developers products such as real time video, real time voice, real time messaging, real time recording, and many other user many other use case specific products. All these products can be accessed through simple APIs and are fully programmable. Our technology makes developers work more efficient and effective, helping them bringing new apps to market and deliver a better end user experience resulting in peak year user relationships. Traditionally, it takes a team of multiple developers several months to build real time video engagement functionalities with high upfront infrastructure costs and without a guarantee on quality and the compatibility. With Agora APIs, you just need one or two developers. For most cases, only one week of coding and testing. No server to be deployed or infrastructure to be built. And you get global coverage with stable quality, a wide range of functionalities and broad compatibility cross platform. This is why tens of thousands of developers around the globe have chosen Agora. We are focused on building developer community, enthusiasm, and innovation. We designed our platform so that it's easy to adopt and enables self serve, ensuring a flexible, no touch experience for developers. We offer more than we offer ten thousand free minutes per app per month, so that developers can experiment with our platform. We have a transparent pay as you go pricing model, so that we can grow with our developers as they grow and scale their offerings. For large customers, we deploy our own engineers to help them integrate it and customize our products, creating differentiated differentiated user experience for them. As you can see, this business model is very efficient and scalable and has allowed us to deliver very strong financial result this quarter. Now let me tell you about our q two performance and a few key business highlights. I'm pleased to report that we delivered revenue of $34,000,000 for the second quarter, an increase of 128% year over year. This was driven by significant usage growth across geographies and verticals as demand for real time video and voice engagement increased significantly in light of the COVID-nineteen. At Aurora, we are proud to see our platform was used by developers around the world to help people collaborate, learn, play, have fun or just stay connected across distance during this challenging times. In addition to tremendous revenue growth, our high efficient business model contributed to positive GAAP net income. Operating cash flow and free cash flow, our active customers reached nearly 1,500 at end of second quarter, up 86% year over year and our constant currency dollar based net expansion rate was 183% for the trailing twelve month period. In this quarter, our platform continued to attract developers with more than 30,000 new apps registered on our platform, bringing cumulative registrations to more than 200 more than 210,000. Working with our developers around the world, we have seen many innovative and promising use case emerge emerging across various verticals. For example, we recently announced our partnership with Seema, a watch party platform that enables anyone to connect and interact or video chat while watching streaming content together. User can host either public or private co watching sessions or watch party where content is synchronized with with with With real time video chat powered by Agora, SINA has seen has seen a 100 times growth since March because of the novel shared experience that it that it creates to bring people together in the same virtual theater at the comfort of their own home. Another example is the co listening service launched by a leading online music entertainment platform. After creating a public or private virtual room, the host become a DJ and choose what music to play. On top of the original HD soundtrack streaming to all members in the virtual room, Overlays by real time voice engagement layer powered by Agora. It brings user the intimate experience of listening to music and share their thoughts together with friends without any compromising without any compromise on music quality. Online exam on text proctoring also emerged in this quarter as a promising use case. Here, candidate monitored online during the test duration through a real time video connection and access the screen of the candidate, both powered by our technology. This kind of online proctoring and remote individually evaluation is expanding at a fast pace in both education and corporate training. Those are just three out of hundreds of contextual real time engagement use case that are possible to achieve without that are impossible to achieve without a growth platform. I'm also excited to announce that we are in the process of launching the first ever experience level agreement or XLA in real time engagement without industry standard or benchmarks of service quality. Customers used to be operating in the dark, not knowing how good or bad the quality of service are. A lot of times have to guess the experience of their end users and their overall things result being impacted by the experience. While our XLA covers metrics such as successful log on rate, data rate, and latency that focus on not only service availability, but also on end user experience. Now with XRA, the key metrics associated within, we can provide transparency on service quality down to every minute in every engagement session. We will also provide future platform usage credit to our customers if they if they if they fail to deliver the level of XRA quality we have guaranteed. The XRA will help our developers better serve their end user, understand the quality they are experiencing, and also further differentiate our products from the competition. We believe it will be a must have for any real time engagement API provider going forward. Finally, I like to thank our 600 plus abhorrence around the globe for their exceptional performance in our first quarter as a public company. And thank you to our developers and partners for their unwavering trust in us. We will continue to create value for our developers and customers through innovation through innovation. And together, I believe we will one day make real time engagement ubiquitous. Now let me turn things over to Jingle. Thank you, Tony. Hello, everyone. I hope you are all safe and well. Let me start by first reviewing financial results for Q2 and then I will discuss our outlook for the full year. Total revenues grew 128% year over year to $33,900,000 in the second quarter of twenty twenty. This was due to both organic growth and the spike in usage caused by COVID-nineteen. On a sequential basis compared to the first quarter, we continue to see usage at heightened levels with strong sequential growth in The U. S. And the rest of the world as social distancing and travel restrictions remain in place. On the other hand, China gradually came back to normal, which led to lower usage compared to the peak levels we saw in February and March, but still much higher than pre COVID levels. We believe this is because COVID had changed people's long term behavior plus user engagement. For this reason, we see the increased usage during this quarter as a promising indicator of a long term growth opportunity and not just a blip on the radar. Our trailing twelve months constant currency dollar based net expansion rate was 183%, again, partially due to COVID-nineteen. As the situation stabilizes, hopefully, we expect our expansion rate will likely come back to levels similar to what we saw in 2018 and 2019. Now turning to cost, expense and margin. There is significant increase in demand and a disciplined investment approach for net income profitability from both GAAP and non GAAP perspectives. For my following comments, I will focus on non GAAP results, which exclude share based compensation expense. Non GAAP gross margin for the second quarter was 66.6%, which was 2.8% lower than Q2 last year, primarily due to our international expansion regions where with higher infrastructure costs, such as South Asia and South America. Because we currently use one standard pricing for all regions, our gross margin in these areas with higher cost is significantly lower than our overall gross margin. Going forward, we plan to address this issue by further optimizing our cost in these areas and gradually shifting toward region specific pricing. Non GAAP R and D expense were $10,500,000 in Q2, up 114% year over year as we continue to build our R and D team. R and D expense represented 31.1% of total revenues in the quarter, slightly lower than 33% in Q2 last year. Looking forward, we will continue to focus on our investment on R and D to drive product innovation and strengthen our technology leadership. Non GAAP sales and marketing expenses were $5,500,000 in Q2, up 22% year over year, mainly attributable to team expansion and increased advertising expenses. Sales and marketing expenses represented 16.2% of total revenues in the quarter compared to 30.4% in Q2 last year. A significant 14% drop in percentage clearly demonstrates the efficiency and scalability of a developer centric go to market model. Non GAAP G and A expenses were $2,600,000 in Q2, up 108% year over year, mainly due to team expansion and professional services fees related to the IPO. G and A expenses represented 7.6 of total revenues in the quarter compared to 8.3% in Q2 last year. Non GAAP operating income was 4,700,000.0 translating to a 13.9% non GAAP operating margin in first quarter. This compares to a net loss margin of 2.2 in Q2 last year. Adjusted EBITDA was $5,700,000 in Q2 with a 16.9% margin compared to a 0.7% margin in Q2 last year. Turning to cash flow. Our operating cash flow was positive $7,500,000 in Q2, up from negative $4,900,000 last year. Free cash flow was positive 3,600,000.0 in Q2, up from negative $6,600,000 last year. Moving on to balance sheet, we ended Q2 with $641,000,000 in cash and cash equivalents, up from $152,000,000 at the end of Q1. The increase was primarily due to the net proceeds from our IPO and the concurrent credit placement as well as a positive free cash flow. Now turning to guidance. COVID-nineteen is still an unprecedented variable for our business model where historical experience may not apply. Our guidance on full year revenue reflects a number of assumptions that are subject to change based on uncertainties related to the impact of the COVID-nineteen pandemic. With that, for the full year of 2020, we expect revenue to be in the range of $125,000,000 to $130,000,000 which would represent approximately 94% to 102% year over year growth. In closing, we executed well in Q2 and we are proud of how our team dedicated themselves to supporting our developers and customers around the world. Thank you to the entire Agora team And everyone, please stay healthy and safe. Operator, let's open it up for questions. The first question we have is from the line of Anderson Chung from Bank of America. Your line is now open. Hi. Thank you, management. I have three questions. The first question is about the COVID impact. I just want to get a rough sense of how much COVID still contribute to the growth in q two and what kinds of monthly traffic trend we have been seeing as we move from May, June to July? And secondly, how should we look at our long term growth in post COVID environment? In the second half of this year, we expect revenue to grow at a 54 to 67% year on year, which I think there should be limited COVID impact in China. So do we expect this growth rate to sustain in the next few years? And for my last question, which is about the overseas expansion, especially in The US, I'm just curious on how we view this opportunity now given the current political environment. In terms of our full year guidance, how much over the revenue growth we embedded in our guidance? Do we assume any impact from the co potential restriction in The US and current political environment? Thank you. Thank you, Timothy. I will take the first two questions, and maybe Tomi can talk about the third one. So as I said, in China, COVID really the situation really eased in April, mid May. And after that, I would say, temporary spike usage caused by COVID was really passed. Also, however, things remain pretty much the same in q two compared to, say, March. And, therefore, actually, we see demand remain at heightened levels and actually the strong growth are still from new apps and use cases and increasing image from users. So it's a a mix of two different situations, and it's very hard to quantify exactly how much additional usage was caused by COVID nineteen. But I would say and I guess I would say it's probably not more than 20% that was really caused by the COVID nineteen situation. And in terms of the run rate, I guess, run rate in June, July, and early August up to now. So far, it's pretty healthy. And I would say, if I'm in today, it's a large extent free from impact of COVID nineteen. So we would expect for the '3 for the quarter of q four, results shouldn't have too much impact from COVID nineteen. Of course, that's assuming the situation continues to stick stabilize and without any further worsening situation, such as the what people call second wave. So that's the first question. And then on the second question, we do see that running into the high quality COVID nineteen, we would see demand spike significantly. And after things stabilizes, demand will some of the demand will go back. However, as the situation in China is clearly shown, even after COVID nineteen, the demand will not go back to pre COVID levels. And, again, that's because people have really changed their editing towards using video engagement across distance instead of having to do everything face to face. And developers and businesses also come to have come to appreciate the efficiency and the convenience of video engage video engagement. And that's why we can use we just see many more use cases. And we will see users stick around with the new to the half this engagement, and that will persist now. So we do see a strong long term prospect. And in terms of revenue growth, we do see that long term demand is definitely there. However, what we cannot control is the emergence and expansion sorry, emergence and maturity of use cases. That's subject to the developers to eventually build and realize all the long term potential. What we can do is provide them with the best tools possible, and that's really our focus. Alright. For the third question, since the beginning, we want to build a global product and, you know, serve global developers and customers. And that that has been our commitment from the from almost day one of the company. Now we already have customers, you know, around the world, not just The US or China. We will continue to focus serving global developers and customers. And the trend we are seeing is developers and customers also becoming becoming even more, you know, a distributed and diverse diversified. Many of them now have worked with the team across geographies and serve users also around the globe. It's hard to say where, you know, many of those were they are really based. So we we will continue to, you know, provide, you know, better service to to customers and developers, you know, any any region around the globe. And we continue to believe that markets other than China and The US will come will contribute a significant portion of revenue in longer term. Thank you. Thank you. The first question we have is from the line of Yang Liu from Morgan Stanley. Your line is now open. Thanks for the opportunity to ask questions. Three questions from my side. The first one, management update us in terms of the demand dynamics from different verticals. I remember that online education is one of the biggest contributor before the IPO? How about the revenue contribution in the second quarter? And how about the growth in emerging use cases like enterprise communication and telemedicine, etcetera? The second question is the gross margin outlook. We are happy to see that the company is expanding to new regions, but the the high infrastructure cost there is kind of concern. What should we look at the or forecast in the long term gross margin given the dynamics of entering new market and also streamline streamline cost there? And the third question is the management update us in terms of the technology performance versus major competitors in different markets, especially given that Agora launched the first industry standard? Do you expect that competitors will be able to catch up in terms of technology performance? Thank you. Thank you. So I will take the first two questions. First of all, on demand dynamics. In fact, the contribution from education in k two was lower compared to q one. The reason was that in China where we generate the majority of revenue from education sector at the moment, q one was really kind of the the peak of the the usage level because all the schools were closed and lot of the education providers had to move all their classes online. And that caused significant increase in demand. And twelfth in April and May, gradually, schools reopened across the country with a few exceptions. And then some of most demand naturally fell back. And that's why in short term, q two compared to q one, in the short term, demand for medication actually decreased. However, looking forward, we continue to believe that education is the most promising vertical, both because the online education sector is growing very rapidly, not just in China, but across the across the the globe. And secondly, the traditional public school education also incorporating more and more video features for distance learning as part of their as part of their overall offering. So we see we continue to see strong demand from all platforms. Previously, we mainly focused on we're mainly focused on small class one on one. And now we see that more and more large classes are also moving also starting to adopt IP technology powered by us instead of the traditional one way streaming technology. And in term of emerging use cases, we continue to see many experiments as one to be mentioned earlier in his remarks, like listening, coaching, like exam, proctoring, and, obviously, as as you mentioned, in fast communication and also health care. These these cases currently contribute to contribute to a small portion of the total revenue, but we see very strong growth there. So if we take a long long longer term view, we do think they will contribute to a a great greater greater proportion of our revenue. So second question on gross margin outlook. We we saw in q two, again, partially due to COVID nineteen, was that a lot more use case, a lot more apps from countries such as, you know, region in South America, South Asia, Eastern Europe, or even Africa. And the situation in these areas is the infrastructure cost, bandwidth, co location space. Everything is actually more expensive. On the other hand, we need price. We need we need to send, and that cost depressed margin in these areas. Previously, revenue contribution from these areas were much smaller, so impact was less material. We also saw that it was much more international across region engagement activities on the platform, which obviously would involve higher infrastructure cost. But, again, we charge the same price to any engagement, and that's, again, partially due to COVID. So as I said, we will try to reduce our cost in those areas, and we'll start experimenting with the regional pricing so that we can ease it issue. However, with that said, in the near term, in the immediate next month or quarters, we will continue to be under pressure in terms of gross margin. In the longer term, we do believe as we scale, we will enjoy from battery, commit scale, and, hopefully, the margin will come back to a more normal level as we have seen in the past. Alright. For the technology performance leadership, I think I mentioned, you know, a few things, including, you know, on on the background, we also keep rolling out the improved audio and video quality releases. But one thing I specifically mentioned is xRNA, where is industry first experience level agreement, which guarantees the, you know, the experience level we provide through our RT APIs, which is not really like in the past. It's only a guarantee of your avail availability, but rather give you a sense and the level of guarantee of how good those audio and video experience are. It's like adding a dashboard for a car, you know, initially before in the past. It's almost like every customer is driving a car without dashboard. But now, you know, we're adding, you know, dashboard for the first time for the whole industry. And we we are also working on additional new game blocks, you know, to help developers to easy more easily create real time engagement sessions or use cases. So for that, you know, I think, you know, that's something like the experience level agreement. It's something, you know, really focused on, you know, helping our customers and developers better use the technologies to create the their user experience or use cases. It it would be something that, you know, in the future, every provider for such APIs has to provide. I believe that's that's going to be the trend. You know, for to that topic, I also like to invite you to join us as at our RTE twenty twenty conference for more product announcement and real time engagement news. This is an annual conference hosted by Agora in San Francisco and Beijing. This year, it will be a global virtual event starting on October '14 for US and European for Europe for US and Europe time zone. And then October '24 for Asia time zone. Registrations will be open very soon. Thank you. A quick follow-up here is related with the escalating China US tension. Do you know Agora is running two headquarter in Silicon Valley and Shanghai and they all have high exposure in both China and US markets? How would this kind of geopolitical tension impact the the business? Particularly, given some of the customer already got banned in The US. You. So US revenue contributions so far for us is high single digit percentage. We're not presently aware of any impact or potential impact to our business, but we don't, you know, want to speculate on where things will go. We will use worry, you know, we will be more careful and watch closely to how things will go. As always, you know, to us, I think as always, change is only certainty as we anticipate in the future. Today, the world is perhaps in a state of change, which some of us may find unsettling. Perhaps some of those changes are seemingly beyond our control. And we don't want to, you know, focus on the things we cannot control. Rather, we want to instead focus on the things we can work on. You know, in any case, we want to reiterate our unwavering commitment to our global developers and customers, including those in The US. We are fully prepared and will meet all challenge wherever they may they may be and whatever wherever it may take. And we will always be open and transparent to our most important assets, our people, our developers, and our customers. Thank you. Thank you. And the next one we have is from the line of Rich Valera from Needham. Your line is now open. Thank you. Thanks for taking my questions. A couple of questions from me. First, you saw really strong quarter over quarter gains in new active customers on the platform in Q2. And I'm wondering what you attribute that to if there was any new or different marketing or new business development activities that may have driven that? Or do you think perhaps COVID was a catalyst? But presumably those customers are new and didn't really contribute to revenue but contribute to future periods. So just wanted to see if you could give any color on those strong new customer additions. Sure. So for us, it's really a conversion cycle. Initially, we need to have a developer registration. So if register on the platform, it can be three minutes, so you start to experiment. And then once the use case is validated, it will it will start to scale. And then gradually, they become customers and value start increase. So the increase in number of active customers in q two, which we define as customers who contributed to contribute more than $100 of revenue in past twelve months. Actually, a precursor to that was the rapid increase in developer registration. As you can see, we added more than 20,000 registration apps in q one, and again, more than 30,000 in q two. I guess that's probably one indicator you can look at in terms of is resource behind the active customer goals. Makes sense. And then you'd identified 210% plus customers in the first quarter. I think one was a social media platform, one was an e learning customer. Did you have any 10% customers in the second quarter? The answer is no. Both of them are still our customers, and each of them contributed about, 9% of revenue in q two, down from 1410% in q one. And as we disclosed before, the 14% customer in q one was education customer, and big part of their business was offline physical classrooms. And that's why she was in most of the classes online with our help. And in Q2, naturally, of that demand faded, but still they remain as a very significant customer of ours. Understood. And then just one more if I could. Your new, sort of quality of experience measuring platform, I think you call it XRA, Could you tell us where you are in the rollout of that? Has it been out there with your customers at this And what feedback have you gotten on it if it has been out in the field at this point? Yes. I will say it's in the process of launching such agreement with our customers. Again, it's a experience level agreement. Basically, it's not guarantee the availability of our servers or APIs, rather a guarantee the latency of real time audio or video or the, you know, the the trigger, you know, of the real time audio video, those kind of things. And by looking at those measurement, you would you will be able to know, you know, no matter it's a million minutes you're running a day on our platform or, you know, ten million minutes a day running our platform. You will know how many minutes it's in, you know, premium quality, you know, how many minutes out of the the total volume is non premium quality, which is good, you know, transparent transparency to, you know, our customers. So we are understanding of the service, real time engagement service they are running on. You already they would be running those services, you know, for their execution purpose or social purpose. Now by able to those numbers and the guys who know, you know, how good it is or how good how bad it is, they can have a sense of how their social education customers, you know, set set satisfaction would be. That's where we, you know, learn from our early sign ups or agreement sign signing with our customers so far. It's I think we we received a tremendous, you know, welcome for that rollout. And maybe I can further point out that this kind of product or service is not really, you know, for our interest. It's what rather, you know, in consider of benefits to our customers and developers. It actually, you know, give us a higher standard to to to to meet to meet in the future. We have to deliver the experience level so that we we will be able to satisfy, you know, the agreement we have with them. And we also put in real commitment by, you know, agreeing on if we are not meeting the level, we will complement them with additional, you know, credits in the future. So this is a very serious, you know, you know, commitment to our customers. That's helpful color. Thank you. Thanks. Thank you. Once again, ladies and gentlemen, you may press star one for questions. The next one we have is from May Lee from US Tiger Securities. Your line is now open. Hi. Thanks for taking my question. So one question for Tony, another one for Jinbo. First of all, Tony, could you please give us a preview of your product road map? Is that is that actually in r and d in the future? For example, what kind of new products or futures are you going to introduce in the next one year or two? And secondly, for Jingbo, your sales and marketing expense ratio improved a lot in the quarter. I believe your development driven go to market motion is very efficient. But given the huge market opportunities going forward, how do you think about the balance between investment for the future and productivity and productivity improvement? Thank you. Yeah. We you know, as I mentioned a little bit just now, you know, we we have, you know, quite a few products in under development, you know, on our road map where, you know, one of the things I mentioned was real time engagement APIs. It's, you know, going to provide additional support other than just real time audio and video, and we'll accelerate or help our developers and customers more efficiently create new use cases. This is something we are going to roll out in the next quarter or so. And, you know, as I mentioned with XLA, the experience level agreement is another major, you know, offering or major, you know, commitment. We we we we start to roll out to our customer in in in in in regions. And, you know, there are more exciting news, you know, really be announced in our r t two twenty twenty conference, which, you know, is annual, you know, conference. It's also the largest one in the industry. We are welcome to to join that event to to to to know know more around those announcements. So on the there's marketing expense. Yep. It's true that the sales marketing expense at percentage of revenue dropped significantly in this year compared with the compared to last year. And I think that's largely due to a developer focused a good market model for some building developer community and the enthusiasm. What we have saying is that this is not a sales driven business model. So what I mean is we can't really just drive sales simply by hiring more salesperson. This is a product that requires deep integration and require the trust from developers. And that's why it's always more important, more efficient to really go where the developers are. And so far, have been doing that through marketing, through conferences, and through all the online forums developer hubs where we have pretty strong presence. And so we're the mouth of developers who have used that service. So it's hard work and it's pretty long term work. And that's why in this year, when revenue increase, the sales and marketing expense simply cannot catch up. And that's why we enjoyed very strong operating leverage and our margin improved significantly. So looking to the future, I totally understand what you mean, how to balance the investment with profitability in the short term. I guess the point is not that we don't want to invest for the future. We certainly do. But the question is how can we invest more efficiently? We think, again, we'll do a lot of new things to further strengthen our developer community and develop our engagement efforts, but that will not be in the form of simply hiring more salespeople. And again, that what that also means is we don't expect sales marketing expense will grow at the same speed as revenue. Thank you. Thank you. Thank you. We don't have any further question at this time. Once again, ladies and gentlemen, if you wish to ask question, you may press 1 on your telephone. Again, ladies and gentlemen, you may press 1 if you wish to ask questions. And the next question we have is from the line of Kevin Jia from BlackRock. Your line is now open. Great. Thanks, management. Congrats on the great quarter. So I have two questions. So the first of all is how do we think about our customers such as the, for example, the education clients or the short video client that they do their own RTE solutions internally? Do we think that self development can be a threat going forward? And my second question is, how do we think about industry level competition? What is the overall market share, and what is the pricing comparison versus others? Thank you. Alright. So for the, you know, customers who's trying to build their own in house solution, I think it's a thing where we've been dealing with from the beginning of this company or this business. Actually, initially, because there's no, you know, so called third party professional provider on this, we have to convert one by one, you know, from in house, you know, technology to our platform. And we've been successful, you know, with, you know, mid size, smaller size, or, you know, some of those workers are very, you know, very successfully, you know, migrating almost all of them. But still, there will be several or, you know, some of those larger ones, they do tend to, you know, want to at least try to do something on their own for the reason of, you know, maybe thinking they could do something as good or it could be, you know, more customized to their needs, which we would consider that as normal practice. We we we run into day to day. But from our view, I think our focus is trying to really become the, you know, professional third party provider, which can show the strengths on qualified, you know, continuous of APIs, on capability, and global coverage, all that. You know, in fact, the SRA agreement, as I mentioned just now, is something I never see any in house developers really have, you know, which we think as a professional provider can, you know, further strengthen our, you know, strength, you know, showing our value to those customers. But it will be a trend that we continue to manage to increase our competitive advantage over those practice. And we have the belief that eventually, third party professional provider will be more efficient and more effective and more professional in doing so. And another question is around competition. I think, again, this is this is a thing that, you know, in the industry from, I think, three years after we established. And it's been growing, especially when the market becomes bigger and bigger. But overall, I think, you know, because the industry is quite early, maybe everyone in this industry, I'm standing towards a radical position and the direction of the industry goals might not be the same. Like, again, I will refer back to XLA. This is something we are the first one to roll out in the whole industry where it shows our understanding and, you know, commitment to our developers and customers' needs. While in other, you know, companies does not really rolling off this offering, I don't think we are really competing on that direction. So we will look more into our customer demand and needs. And the truth is we are actually seeing a lot of additional demand that we haven't yet fully satisfied, which is the area we are going to continue to focus on. Great. Thank you. Really appreciate this. Thanks. Thank you. Again, we do we don't have any further question at this time. Again, ladies and gentlemen, if you wish to ask question, you may press 1 on your telephone. Once again, it is 1 for questions. Once again, ladies and gentlemen, you may press 1 for questions. We don't have any further question at this time. I'll now hand the conference back to today's presenters. Please continue. Alright. Thank you for joining our conference call. And, you know, welcome to, you know, again, participate our feature events and join our RT twenty twenty, you know, online events. Thank you. Bye bye.