All right, great. Thank you. Good morning, everyone, and thanks for being here at the Raymond James TMT and Consumer Conference. I'm Rick Patel, research analyst covering digital commerce and soft lines here at Raymond James. I'm thrilled to be hosting our next company, which is Revolve. With us from Revolve is co-founder and co-CEO, Mike Karanikolas. Mike, thank you so much for being here.
Thank you.
Maybe just to, you know, help level set, you know, the story here with those that are new to it, can you just talk to us about the Revolve story, you know, how it evolved and how it differentiates itself from other online fashion companies?
Yeah, definitely. So Revolve was founded a bit over 20 years ago, actually out of a house that I lived in with my co-founder, and we had no fashion experience at the time. My background was technology. His was, you know, kind of business analytics. But we felt like it was a great market opportunity, and I think, you know, that lack of fashion expertise was a hindrance in the initial years, but became a long-term strength as we developed a great fashion expertise and core and a great team that understood that. Also, my partner, if you watched his transformation over the years from a guy that looks like he knows nothing about fashion to, you know, to fashion guru.
We became experts in the space, but I think what was great was that background of not having the fashion experience, it forced us to rely on other skill sets, you know, particularly data and technology from the start, from the core, 'cause that's what we understood really well. So, you know, from the start, we were building out complex internal systems to kind of monitor the selling of our inventory, predict what's going to sell well, monitor different attributes of inventory, really get ahead of the trends. And then the other thing that was really critical to us also was, you know, predicting what brands were going to become hot. And because of that, we had to become experts at marketing and understanding what it is that's actually causing consumers to gravitate from one brand towards another.
And then a big unlock for us, you know, call it eight, nine years into the journey, was when we leveraged that skill set we had learned monitoring brands, trying to predict what the next hot brand was going to be, and then we applied those same principles to our brand, 'cause we had never really invested in brand marketing. And so, you know, we became, you know, really the brand for next-generation consumers in the premium space, and I think that's a key differentiator of ours. You know, there's a lot of kind of next-generation companies out there that are marketing to younger consumers and marketing in new ways that these legacy retailers, you know, haven't really figured out how to do in the right way, you know, like a Nordstrom or a Saks.
You know, they'll have a presence on social media, but it's not in the same way as these newer players. But that's what differentiates us. There's no one really else in this premium space with our level of inventory selection, customer base, anywhere near close to us, you know, versus the lower price zone is a constant prey. And, you know, for those of you that have monitored the space, I think you've probably seen it, where, you know, like, you've got one hot brand, and then it gets overtaken by the next hot brand, with SHEIN being the latest one, 'cause it's so easy to enter that space. So that's a key differentiator for us, is we look at the space. In the premium space, you've got your legacy department stores, you know, the Nordstroms, the Saks, the Neiman Marcus of the world.
We've been taking share from them for years. It's tens of billions of dollars of share. You know, even in a tougher year like this past year, we've continued to take share from those players. And I think that's the big differentiator, that you've got us with this next-generation marketing capability, with this technology-powered organization that's going up against these legacy players that just can't compete, and that's why, you know, for 20 years, we've been taking share.
That's great, and I'd love to hear about just your thoughts on the macro. So that's a theme that comes up a lot with investors. So, you know, the current macro has been a negative impact, I think, to a lot of different companies. Just curious how we should think about the impact on your business and whether you're seeing green shoots as we look ahead.
Yeah, definitely. I mean, we've been doing this 20 years. We've seen a number of cycles, and, you know, certainly 2008 was, was a tough one that, that we lived and managed through. You know, self-funded for the first 10 years, so, you know, we had to make sure we were, you know, making the right decisions constantly, you know, to, you know, to optimize the business and, and, and really stay in business in, in those times. And, you know, it's interesting, a recent earnings call, Mytheresa CEO, called it the worst luxury market he's seen since 2008. So I think that gives a picture of what the macro looks like right now in certain segments. And I know there's a lot of confusing indicators.
You know, you've got GDP up, you know, however many percent that seems insane based off how people are feeling. You've got, you know, GDI, you know, looking not so hot. But I think when you look at, you know, kind of pockets of where people are spending, that's where you see where macro is really impacting things. You know, Bank of America released a stat that, you know, they saw luxury spend was down, I think, 16% year-over-year. So, you know, it's been tough in the premium zone, particularly for aspirational customers. You know, that's what the Mytheresa, you know, CEO mentioned also, and that's our base, these aspirational customers that are trying to live their best life.
That's what Revolve is all about as a brand, and one of, you know, that kind of big differentiator, we invest in that brand strength. And our customers right now don't feel like they're living their best life, and that reflects in the numbers.
And so in that context, can you talk about customer acquisition in a choppy macro? So as you think about the business, you know, where do you have confidence in terms of being able to acquire more customers? And you know, what are, what are the puts and takes there?
Yeah, so you know, you know, we're proud that, you know, despite the macro environment, we still grew our active customers by 12% in the most recent quarter. You know, we're historically a growth company. We've grown the company nearly every single year, been profitable every single year but 2008. You know, and, and that gives us the flexibility to continue to invest in the business, even in tough times, because we don't operate on super tight margins, so we can continue to invest, continue to grow the customer base, and, and that's our philosophy, that we want to invest through good times and bad.
I guess, as we think about Revolve business, I know you take a lot of pride in, in the service aspect of the business.
Yes.
Can you talk to us about the levers you see to increase the repeat rate and to grow customer loyalty, and within that construct, you know, where do things like the beauty category and men's fall into it?
Yeah, well, I mean, I think our repeat rates are already quite phenomenal within the industry. You know, for cohorts that have already been with us more than a year, it's been close to 100% retention historically. And that's something I'm really proud of, and I've always felt like—you know, if you're going to build a big business, you have to do right by your customers. And, you know, obviously, from a service standpoint, we pride ourselves on that. But, you know, it's not just service. You know, you have to bring them the right styles. You have to make them feel a certain way when they're shopping your website and putting all those things together. And, yeah, so that's something we've focused on over the years.
But, you know, that said, I think as good as that number is, it can be even better, and you touched on some of the levers. You know, customers do think of us a lot when they're thinking, you know, kind of what are they going to wear, you know, to the party they're going to, or what are they going to wear on vacation? You know, so some of these kind of highlight moments of their life. But, you know, we don't have as much market share for her in other categories and other phases of her life. So, you know, for example, we sell basics and essentials, but we're not really her number one destination for that.
You know, beauty, we've had great progress, and I think the most recent quarter, was it 30%, or what numbers did we release, or was that just the month of September?
Plus forty-four.
+44. All right, even better than I thought. Yeah. So, yeah, like, you know, beauty is an example that's been accelerating. You know, we're currently in, call it, the, you know, mid-single digits or low to mid-single digits, but we think that has a lot of opportunity. So yeah, you know, huge share there. And, you know, I think if we take care of our customer in the right way, we've got that trust with her from a brand standpoint, both the fashion, you know, credibility and kind of, you know, the credibility with how she's going to look and feel, and then the service credibility. That gives us permission to expand into these other categories. So, you know, big revenue opportunity and big retention opportunity.
One of the questions that we get a lot from investors is around the return rate. Just love to hear your thoughts on the trends that you're seeing there and the levers that you can pull to improve that.
Yeah, you know, that, that's certainly been, you know, frustrating, I think, for investors the past, the past year, and it- you know, and certainly for the company. You know, because while we've been profitable the past year, the profit margins are not what we're used to and what we'd like them to be, and return rate has certainly been a factor. You know, if you, if you rewind, you know, call it four years ago, you know, call it roughly 230 basis points of, of margin has been impacted by the rise in, in return rates, you know, particularly post-COVID. And, you know, we've been doing this a long time. Return rates have gone up, they've gone down. In, in the COVID period, they certainly went down a lot. Right now, return rates are high.
You know, we think it's a combination of things. You know, this current macro environment, for sure, you know, we think is playing a factor in the return rate, but there's a lot of opportunities to get it down. You know, what I'm focused on is win-win type stuff. There's easy ways to get it down. I can make it more difficult for someone to return, but, you know, for me, that's not the North Star of what we're trying to do with the business. Now, you know, long term, we need to be at certain margin levels, and we will make sure we're there one way or another. But you know, for me, it's a choppy margin environment. You know, you know, there's no need to do anything that makes the customer experience worse.
I'm focused on making it better and focused on win-win ways to reduce the return rate. You know, I mentioned earlier, you know, expansion of other categories. I mean, you know, kind of basics and essentials, those have both price point and low return rates associated with them, and that's a huge opportunity for us. You know, there's a lot of things we're working on the technology information side. We deployed a tool a couple quarters ago, or the most recent quarter, that, you know, helps customers visualize accessories and handbags on themselves on the FWRD website. That actually showed a nice reduction in return rate. So a lot of win-win ways, making the customer experience better that we're focused on.
You know, we're hopeful that investing in those areas, combined with, you know, efforts we're making on logistics costs, are going to show some really nice gains next year. And we're going to get, you know, margins back up in a substantial way. You know, the most recent quarter, we were around 4%. You know, EBITDA margin, which, you know, is not where we want to be. I mean, I think it's better than a lot of the e-commerce apparel peers, who are almost never profitable. You know, for us, that's a, you know, that's a low. We don't wanna be at 4%. We wanna be at, you know, double digits at least and beyond. So, you know, we're focused on, you know, making sure we have a nice rebound next year and drive towards those double-digit margins.
You touched on logistics costs. Can you just expand on the opportunity you have to reduce those logistics costs and whether those initiatives have started to bear fruit yet?
Yeah, definitely. Yeah, there's a big opportunity, and we have had actually some really nice gains thus far from our logistics initiatives. It's just, I think, a bit frustrating, both internally and for investors, because that was offset in the most recent quarter, you know, by some changes in ASP and fuel surcharges and return rates and other things that overshadowed them. But some really nice gains and a huge opportunity. You know, certainly long-term, the international business, I mean, that's an area we've shown great growth in and you know, it's profitable, but at lower margins. But, you know, we've upped the service levels in a huge way there.
You know, bringing fast two to three day shipping to most areas of the world, and in most areas, it actually gets closer to two days. You know, free returns in most areas of the world. And that's something that costs money now, but as we scale the business and can get more inventory on the ground, we're going to be able to, you know, leverage that and reduce costs there. You know, a lot of work we've done with, you know, rate negotiation with carriers that we're hopeful will be, you know, fruitful in the upcoming year. Working with alternate carriers, and alternate carriers are tricky because service level is so important.
You know, so it's, it's, it's a process, but we've found some great alternate carriers that can save us money and that are producing great results in terms of, you know, a lot of finer metrics that other companies don't look at. And there's actually an alternate carrier that we recently had to pull back business from, you know, because some of their submetrics, you know, like on time and lost packaging and things like that, weren't quite where I wanted them to be. And, you know, I was talking with, with the president and, you know, he said, like... he said, "Well, Nordstrom uses us and doesn't have a problem with it." And it, it, you know, and, and, you know, Nordstrom, you know, I have a lot of respect for that company.
You know, it's really one of the ones we feel like we're taking share from. But, you know, I have a lot of respect for them, and they certainly pride themselves on service. But you know, you know, I think that's just an example of how, you know, we're always going to focus on providing the best experience and building for the long term. And I don't wanna sacrifice, you know, long-term elements or customer experience just to gain a little bit of margin in the short term. We're going to figure out how to do both, and that's what I'm focused on. And we've found some great alternate carriers that are delivering both, and those are the ones we're focused on.
... And we'd love to hear your thoughts on AI. Obviously, a big focal point for all investors right now. You know, as we think about the industry from thirty thousand feet, you know, how do you see AI playing a role within the industry, and you know, how will customers experience brands differently as AI develops further?
Yeah, I mean, I think it's huge. I think it's incredible. You know, my background is in technology. You know, so, you know, certainly an aspect of it is personal, that that I, that I love it personally. But I think it's huge from a business standpoint. I, I think certainly within any kind of retail, and fashion, and, and, and brands, we're at the forefront of, of, of what's going on there. You know, we've, we've, we've launched, AI-designed, clothing collections already, and, and, you know, some really great pieces, including some that, that, that sold out. You know, we've, we've, you know, we've created AI imagery-generated billboards, we've done marketing campaigns around... We're starting to use AI in our regular homepage and email, cadence, internally developed AI-generated images.
But we take the exact product that we have in our inventory, and we're able to get that into the AI picture, so it's representing the product properly. So, you know, we've made a lot of progress there, but really at the forefront. You know, I don't know the exact timeframe, but certainly over, you know, a five year-plus period, and likely even shorter, I think it's going to have dramatic, you know, transformational changes within the fashion industry across a number of areas, whether it's in kind of the marketing, you know, kind of content creation, you know, whether it's, you know, various forms of imagery on the website. You know, it's all sorts of things you can do, you know, increased personalization, you know, on, on the imagery for customers.
You know, and then within our own company, we've actually been using AI for many years. You know, not necessarily the newer generative stuff, which is kind of the sexiest form of AI. Yeah, I could go on and on. You know, I think it'll also transform the way customers browse and shop for clothing. We have some new tools we're working on that, you know, are a lot more kind of inspirational in nature and kind of capture the vibes of what someone is looking for, and they can kind of jump around quickly using these AI sort of search technologies, which work very differently from traditional. So yeah, I think it's going to transform the industry, and I'm excited to lead the way in terms of where it goes.
Looking forward to seeing the progress there. I'd love to shift gears and talk about international. You operate a global enterprise. As you think back to all the work you've done and progress you've made in international markets, you know, what are you—I guess, what are you most proud of and, you know, where do you see the most opportunity to do better?
Yeah, I mean, I'm very proud of the progress we've made. You know, close to 20% of the business is international. And, you know, particularly the service levels, obviously, that's close to my heart. It's something that I believe in. But, you know, I also remember, you know, a conversation I had with our VP of International, maybe seven years back, you know, before we had these service levels in place, and, you know, basically just talking with him about, like, this is where things are going. If we want to win internationally, we've got to get the service levels close to on par with the U.S.
You know, essentially, no matter what the cost, but, you know, let's make the costs, you know, reasonable enough, you know, that we don't lose our shirt doing it. And, you know, it was demonstrated time and time again in market after market that that plan was successful, and as we've been able to scale, we've been able to to get some of those costs down. So I'd say that's what I'm most proud of. And then, you know, maybe, you know, kind of opportunities and things left on the table, you know, the Eastern Asian markets are a big opportunity for us. That, you know, maybe we could have moved faster and earlier.
You know, for us, our brand marketing is very powerful worldwide that we do on social media, but Asia is the exception because they operate on different social media channels, largely, and certainly they have familiarity with us. But we haven't been able to build our brand to the same level, say, in China or Korea, that we have in, you know, the UK or Australia. And so, you know, that's a huge opportunity for us. We're just starting to invest in a bigger way there. We hired a new head of China. We're bringing in a new brand director within China, and we think we can start making big investments on the marketing side to go after, you know, what is, you know, kind of a huge market, obviously.
Yeah, so as we think about just the investments that are needed to support that growth, you know, can you maybe paint a picture for the resources that you have in international markets and where more investments might be needed?
Yeah, I mean, so we're looking to up our brand marketing investments in general internationally. Now, granted, things we do in the U.S. do translate internationally, but more localized events. You know, so we had an event in Mexico earlier this year that was a huge success, one in Singapore recently. So we're kind of ramping up our brand marketing playbook in these international markets. And then China in particular, it's going to take a lot of brand marketing and investment, and we're hopeful we can do it in a very incremental way, both in the short term and long term. And we're making sure we have the right people in place, the right plan in place to make those investments.
But it will take investment to build the brand in China in the same way that we built in the Western markets.
I'd love to talk about FWRD. You know, really great platform, but it's going through a bit of a challenge right now with the rest of the premium side of the industry.
Yeah.
You know, where do you see that side of the business evolving to? And maybe talk to us about the potential to cross-pollinate FWRD with Revolve.
Yeah, FWRD is a huge opportunity. You know, right now, it's certainly not looking as sexy, as you know, maybe a year or so ago, when it was looking at triple-digit growth rates. You know, FWRD went through a period of incredibly explosive growth above triple-digit growth rates for a number of quarters in a row. And you know, it, it's kind of lapping some of that overshooting. I think, you know, in 2021 and early parts of 2022, the luxury market overshot itself. People were feeling really good and splurged and, and now they're, you know, kind of pulling back or, you know.
If in a normal year, they might purchase a handbag or two for themselves, in 2021, 2022, they were maybe purchasing four or five, and in the current environment, maybe, you know, maybe not one at all. So, you know, FWRD's experiencing that right now, but the long term is really bright and rosy for FWRD. Huge opportunity in terms of leveraging that REVOLVE customer base onto FWRD. The REVOLVE girl, when it comes to bags, accessories, shoes, she shops the kinds of products that FWRD carries, is a huge portion of her budget, you know, kind of those sort of true designer items. And so, you know, we think we're just scratching the surface on what we can do there.
You know, FWRD's also positioned well as, you know, the largest, pure-play online luxury retailer based in the U.S., which I think is also an advantage, you know, both from a logistics standpoint, but also a positioning standpoint. Now, granted, non-pure-play guys, right, like a Saks or larger, but, you know, that's kind of the same position Revolve's been in, where you know, that legacy competition is generally easier to go up against and take share from. So, you know, big opportunity, even if it's going, you know, through a rougher period, kind of cycling those highs of 2021 and 2022 right now.
And what about the Own Brand part of the business? So maybe update us on. Well, how big is that side of the business, and, you know, where do you see this eventually growing to? And you've done it for a while, you know-
Yeah
if you think about the history there, like, what have you learned about what works and what doesn't work?
Yeah, yeah. We've done it a while, and, you know, it, it's a very important part of our business. You know, it's called around 20% of the business. And, you know, we've, you know, done a lot of things right there, and we've made some mistakes there historically, too. You know, so we tried to grow it a little bit too fast, too quickly, not diversified enough, a few years back, and we pulled back after doing that. We want to make sure we've got the formula right, we can grow it in the right, sustained way, and it's a huge margin opportunity. So, you know, as a point of reference, Revolve in the most recent quarter, the gross margins were similar to what they were in Q3 of 2019.
You know, slightly lower, but very similar. And that's despite own brand share being down, you know, call it close to 1,600 basis points from that time period. And own brand carries a substantially larger margin. So, you know, for us, just building it back up in the right, sustainable way, where inventory's under control, where we've got quality under control, where we're diversified across products versus trying to cram too many of the same type of thing other, which is the mistake we made back in 2019, that's going to be a huge margin driver in the years to come.
So, you know, we're not providing a specific endpoint, but certainly I would like to get it up 1,000 basis points or more over a multiyear period, and that'll have a substantial impact on margin, you know, should we successfully execute that.
Maybe we can expand on just the margin commentary. So, you know, as we think about gross margins for this year and maybe longer term, you know, how should investors think about the puts and takes?
Yeah, so, there's a huge margin opportunity on the, on the product side, as I mentioned. You know, despite the fact that we're already close to 2019 levels on REVOLVE, REVOLVE itself, even outside own brand, has opportunity for margin expansion, you know, just by continuing to get back to normalized inventory levels. It's essentially close, but you know, it still has, you know, a little bit of an overhang from prior years. So there'll be a natural rebound there. We've got own brand that's going to be a driver. FWRD is not in a healthy inventory position yet. That's going to drive gross margin forward. You know, continued discounts with our vendors on the third-party side, you know, there's a decent amount of opportunity there.
So a lot of opportunity on the product margin side. You know, on top of that, you know, logistics costs, return rates are something that we're focused on, you know, particularly, you know, if we can execute our plan to successfully expand in, you know, into basics and essentials, that's going to be a big driver of kind of the transactional costs. So it's a big opportunity there. Overhead as a % of sales, you know, we run generally fairly lean, and we'll continue to do so, as the business continues to grow, and then the business has grown in nearly every single year since we've started. And, you know, even just online sales are projected to continue to grow.
Like, this has been a bad year for online, but if you look at the kind of multiyear projections, it's still expected to grow double digit or close to double digit online. So, and we've historically, you know, beat whatever the, you know, kind of overall market numbers are. So, so, you know, leveraging overhead as a percentage of sales, and then in a longer term state, you know, marketing as a percentage of sales, we can tap down a little bit. It's not something we're ready to do yet, but in a longer term state, we can do that. So, so yeah, a lot of opportunities across the different areas of the business.
Yeah, maybe if we could just double-click on the OpEx side of the equation. How do you balance, you know, pursuing the growth initiatives-
Yeah
that you have, globally, versus managing, margins in choppy macro? Like, how, how do you think about that balance?
Yeah, I mean, we're always focused on the long term. We're, you know, founder-led. You know, my co-founder, Mike, and I still own close to 50% of the business. So, so we view it as a business that, that we own, and, and, and that means thinking long term. But in my mind, thinking long term doesn't ignore what's going on in the short term. You know, so it's always that balance of making sure you're generating enough cash in the short term, and you're not setting yourself up for too far a climb in margin, while making sure you're investing for the long term.
So that's our mindset, and, you know, I think you've seen it from things we're doing this year, where, you know, we've had some nice investments in AI, I think really leading the pack, you know, in terms of retailers and brands, in terms of the things that we've done there. You know, big investments in the organization centers up for the long term. You know, we're starting to build out our workforce globally, which I think is a huge opportunity. We recently expanded our customer service internationally, which I know may not seem like a new thing, right? Companies have been doing it for years, but I think we did it in a very different way. I think the usual approach is: How much money can we save? For us, the approach was-...
Okay, we think we can save some money, but how do we do it in a way where we're not just maintaining service levels, we're increasing them? And so I, you know, I think we're known for really high service levels. You can see it from our Net Promoter Scores, which, you know, were, you know, records in recent periods, customer satisfaction. I think if you just talk around, right, people will say we have great service. Our international teams actually exceeded the U.S. team's customer service at, call it, less than half the cost, just as an example of one success story that we've put in place.
You know, I think it'll vary by, you know, type of position and all of that, but I think there's a big opportunity to get the same or higher quality internationally by investing in the best of the best, which is what we did with our customer service. We paid far above market rate wages to get the best talent, and we're planning on doing that across the organization to, you know, really, really kind of build up our organization, in a way that's both cost-effective, but then not sacrificing in any way, you know, quality and capability.
If we think outside of just the profitability and, you know, the financial part of the equation, you have a very solid balance sheet, very strong free cash flow generation. You know, how should investors think about capital allocation?
Yeah, well, you know, I mentioned earlier, you know, we're founder-led and, you know, still own nearly half the company, and so, you know, I, you know, I think, you know, certainly I take the responsibility of managing investors' cash, you know, very seriously. I, I take that personally, regardless of whether I owned close to 50% of the business or 0% of the business, I would treat the cash as my own. And then, and then, you know, really it is, or, or, you know, call it close to a quarter of it is my own. And so that's how I manage and think about the cash. What do I want to do with this cash to put it to the best work in terms of risk reward?
So, you know, certainly we look to invest within the business first in terms of opportunities, and I think you've seen that in the current year, where, you know, despite margins being lower than we wanted them to be, we're making sure we continue to make investments in the future and moving the business forward, regardless of the short-term numbers. And then, you know, beyond that, we, you know, we look at, you know, ways to return money to shareholders, in various ways. You know, certainly M&A is the kind of thing that I think, you know, can be a very high leverage opportunity. So it's something that we constantly look at, but obviously there can be a lot of risk there, too.
So it's something we're very active in, in terms of thinking about, but we're very cautious about what's the right opportunity to pull the trigger, right? And then beyond that, you just have your traditional ways of returning money to shareholders, dividends, share buybacks, and you've seen we've done a share buyback period in recent periods, and we think it's a great opportunity to return money to shareholders in that way. You know, and certainly the stock price is depressed, and you know, I think that makes it an advantageous time to deploy capital in general versus you know, deploying capital when shares are at peaks. So because again, you know, we've been doing this 20 years.
We've been through, you know, peaks and valleys, highs and lows, and, you know, you know, I think generally that's one of the better times to get your money and capital in, when things don't look so rosy, but you know those long-term fundamentals are in place.
Well, we covered a lot of ground. I guess maybe to wrap up the discussion, as you think about the next year, you have a lot of opportunities in front of you. What excites you the most?
Yeah, I mean, certainly getting back to a normalized macro environment I think will be nice, you know, for our investors and employees and everyone. You know, just seeing that return to growth, seeing those margins, you know, jump up in the way that, you know, we're hopeful will occur. And then, you know, like the long-term opportunity, you know, is still incredibly big. You know, we're still a small fraction of the overall luxury space and premium space. You know, certainly those legacy players that we've been taking share from have tens of billions of dollars between them. So just continue to drive towards that North Star. And then for me, what always excites me is: how do we do even better as a company? How do we raise the experience even more?
How do we, you know, get even better on the fashion and marketing side of things, and you know, kind of take, you know, fashion and customer experience into the future? And that's been our mindset from day one, and it's served us well, and we're going to continue to do so.
That's great. Well-