Groupon, Inc.

Hello and welcome to Groupon's first quarter of 2024 financial results conference call. On the call today, our CEO, Dushan Segbo, CFO, Yuri Bonner, and FPP Corporate Development and Investment Relations, Rana Kashyap. At this time, all participants are in a listen-only mode. A question and answer session will follow the company's formal remarks. To ask the question, please press the star key followed by the number one on your touchtone phone. Once again, that's star one to ask a question. Today's conference call is being recorded. Before we begin, Group 1 would like to remind listeners that the following discussion and responses to your questions reflect management's views as of today, May 9th, 2024 only, and will include forward-looking statements. Actual results may differ materially from those expressed or implied in the company's forward-looking statements. Groupon undertakes no obligation to up these forward-looking statements as a result of new information or future events. Additionally, information about risks and other factors that could potentially impact the company's financial results are included in its earnings specialties and in its filings with the SEC, including its quarterly report on 4 and 10Q. We encourage investors to use Groupon's investor relations website at investor.groupon.com as a way of easily finding information about the company. Groupon promptly makes available on this website the reports that the company files or furnishes with SEC, corporate governance information, and select press releases and social media postings. On the call today, the company will also discuss the following non-GAAP financial measures, adjusted EBITDA and free cash flow. In Groupon's press release and their filing with SEC, each of which is posted on its investor relations website, you will find additional disclosures regarding these non-GAAP measures, including reconciliations of these measures to the most comparable measures under U.S. GAAP. Before we begin, I'd like to apologize for the technical difficulties for starting this call late. And with that, I'm happy to turn the call over to Dushan.

Hello, and thanks for joining us for our first quarter 2024 earnings call. It's a pleasure to be with all of you. Today's prepared remarks are posted on our investor relations website along with an investor presentation, which I will refer to during my remarks. In addition, I encourage you to review our press release and 10Q, which contain more detail on our first quarter results. I will start today's call on slide five and cover our first quarter numbers. Our business grew plus 1% year over year in the first quarter. While 1% growth is far below my ultimate goal and the opportunity I see ahead, I am pleased to achieve this milestone. You need to travel back eight years to 2016 to find the last time that Groupon grew revenue on a consolidated basis. Our strong performance in Q1 was driven by our North America segment, where revenues in our North America local and travel categories were up a combined 8% year over year. In addition, our active customers in North America local and travel grew on a sequential basis. As a reminder, these two categories represented 74% of our total business in Q1. While we are far from declining victory and clearly have more work to do in our international segment and our goods category, we believe the improved performance of our main market is a strong positive indicator that our transformation plan is working. There is no single silver bullet that drove this improved performance. It's a result of many changes aligned with our transformation plan across our business, including but not limited to rebuilding our performance marketing channels, reducing our reliance on promotional spend, improving our productivity through addressing low-hanging fruit across our business, and improving supply quality through our sales transformation efforts and returning merchants as the macroeconomy normalizes. Taking a step back, a year ago our business was declining over 20% with negative adjusted EBITDA and we had disclosed substantial doubt on whether we had enough cash on hand to meet our bills as they come due over those next 12 months. Fast forward to today, we can see our top line is stabilizing and our last 12 months adjusted EBITDA is at 80 million. Our Q1 cash flow performance significantly improved compared to previous years, and there is no longer substantial doubt on our ability to meet our obligations as they come due. In short, our business, which was in critical condition after a long-losing spell, is back on its feet, but not yet firing on all cylinders. Momentum is in the right direction, but continued rehab is required to get back to winning again. With enough time, discipline, and consistency, I am confident we can restart the engines of sustained growth and realize the potential we all see for our business. Slide 6. Marketplace Management On the demand side of the marketplace, we continue to see improving trends in the number of unique visitors, driven by growth in paid channels and improving rates of decline in direct and managed channel traffic. Within paid channels, we delivered on our desired ROI targets while continuing to grow in SCM and display. As a reminder, in Q1 and Q2 of last year, we rebuilt our performance marketing campaigns and we were just starting to ramp up our paid spend, so we are lapping easy comparisons this quarter and next quarter. On the supply side of the marketplace, we continue to see strength in our things-to-do vertical and our enterprise accounts, where we see former Groupon merchants return to our platform after a long hiatus and existing Groupon merchants increase the amount of business they want to do with Groupon. Both are encouraging signals. We also saw great performance from North American travel in Q1. The largest driver was an increase in the number of days live on our site by our largest accommodation merchant. 2023, we implemented a connectivity solution with this accommodation merchant. By removing friction from the booking process, we've been able to reduce the operating costs and become a more favorable channel for one to distribute their inventory on a more consistent basis. The integration also leads to a better customer experience. This is a great example of the bookability flywheel in practice and one we are looking to build on across our business. That said, going forward, I don't expect North America travel to post a similar growth rate in Q2, as several factors, including recent site performance issues, which I will cover on the next slide, have hurt our North America travel performance in Q2. Finally, as announced at our last earnings call, we have taken a regionalized approach to managing our sales teams for local in the U.S., with each sales region with dedicated sales reps to drive freshness and account managers, to maintain and grow existing businesses, all guided by an expert market manager. The inclusion of territory expertise adds another dimension to our sales reps, providing several benefits, including a local market understanding of gaps between inventory and customer demands, awareness of competitive supply, and impacts of shifting sales and local nuances in preferred deal structures and target economics. Slide seven. product updates. Starting in mid-March, we started to experience an unexpected drop in performance as we saw a pullback in our conversion funnel despite minimal change to traffic trends. This has impacted our APRI results and continued into early May. The drop in performance happened around the same time we were ramping up our new front end, which initially led us to suspect our new front end was causing the performance change. Under further investigation, we diagnosed the conversion issues were mainly related to two separate short-term technical issues. First, as part of our efforts to modernize our technology stack, we launched a new third-party tool that identifies potentially fraudulent transactions on our platform, replacing an old internal tool that was very manual, inefficient, and delivered a poor customer experience. Every month, our customers were sending us thousands of complaints about unfulfilled orders, which at their root were caused by lengthy order processing times linked to fraud verification. Our new process evaluates transaction risk in an instant, resulting in a much improved customer experience. Over time, we expect our upgraded fraud platform will lead to better conversion. Unfortunately, due to initial learning curves specific to our business, The new process initially hurt us more than it helped us. We have been working hard to close the gap and have almost achieved performance parity with the old solution in the last few days. Second, we ran into a challenge with our legacy search and relevance algorithm. We previously made the decision to move away from our internally developed algorithm and adopt a third-party tool, which is already powering search and relevance on our new front-end and several legacy applications. Unfortunately, one of our larger legacy applications still relies on our legacy solution. We made the basic fix, but the long-term fix will require us to migrate 100% to the new frontend. Search and relevance is a core service for our marketplace, and I see a significant opportunity to drive better conversion over time once we have our new frontend in place. This is a lot of operational detail, but I want investors to understand what is driving our performance as well as our challenges. Overall, we have already recovered the majority of the performance drop, but we are still not back to where we would like to be. We expect it will take us the better part of the second quarter to get back on track and is the main reason behind our second quarter guidance which EZ will provide. Turning to the new front end, in the midst of the performance issues, we made a decision to pull back on the ramp up of our new front end, which at the time was running at 50% of web traffic in North America. It's currently back to 3% and we expect to start ramping back up later this quarter. Our goal is to have the new front end fully ramped on all surfaces in all regions in time for the Q4 holiday season. Navigating the operational complexity facing our business had made it significantly harder than I expected to make quick changes to our product proposition. Based on my prior experiences building internet products, I believe it would take a small team of developers a matter of months to recreate Groupon front-end experience. The difficult part of Groupon is integrating the new front-end into the wide array of existing legacy internal services that make up the rest of our technology stack. We are making progress and I'm confident that we will deliver on our goal to modernize Groupon, but it's taking longer than I originally expected. Given the operationally complex turnaround, I expect we will continue to face hurdles which may delay our progress and may impact short-term performance, but not lessen our resolve. I still expect our business to inflect to sustain growth sometime in the second half of this year, but exactly when within that six-month period we inflect will depend on our delivery of our projects. Slide 8 and 9. As we updated investors at our last earnings, we have shifted into the building phase of our transformation and are working on many projects across the company to change our customer experience on both sides of the marketplace. Our vision is to build a healthier marketplace at Groupon through driving merchant and customer flywheels. The core idea is that changing Groupon's value proposition for a consumer or business won't come from a single grand gesture or a splashy brand campaign, but through a series of never-ending product enhancements that address customer pain points. Each incremental change builds on the value on both sides of our marketplace from doing business with Groupon and reinforces the flywheel effect. Trust is at the center of our efforts on both our customer and merchant flywheel, and we believe it is essential for health and marketplace. For merchants, We want to become a trusted marketing partner for them to acquire and retain customers. For consumers, we want to be a trusted and convenient destination for local experiences and services. Let me provide a few examples of what we are doing to build trust in our marketplace. First, we recently delivered a new feature to our local merchants in North America to enhance transparency for merchants by providing them with dashboards to monitor deal performance, and sharing the impact on their sales when running on promotions. This is just the beginning. We are laying the groundwork to offer advanced but simple tools to help merchants manage their deals and achieve their business objectives. Second, on our strategy of shifting from quantity to quality, we have taken action to remove low-quality deals from our inventory and progress on an initiative to help quality merchants curate their deals. We are using AI to identify merchants' unique selling points and then significantly enhance deal content, including imagery and in-the-future video, to capitalize on what sets these merchants apart and drive demand toward deals. Third, our bookability initiative. I earlier mentioned how connectivity helped drive better performance with one large accommodation merchant in travel. We recently launched an integration with SiteMinder, a leader channel manager, with over 41,000 hotel connections globally. Connections will help us more seamlessly and dynamically onboard, price, transact, and redeem new hotel partner inventory, while also providing customers with a smooth online booking and redemption experience. Only roughly a third of our direct accommodation inventory in Treadle is bookable, and our penetration is even lower in local. Over time, our strategy is to significantly increase the number of bookable deals we currently offer. Before I turn the call over to Yuzi, let me provide a few closing remarks. As announced earlier this week, I reached an agreement with our board to assume the role as permanent CEO. First, I want to thank the board for their confidence in me to continue to lead the company. Second, if you want my motivation for taking this permanent role, the work is not done. My aim is to bring Groupon to a sustainable growth trajectory and build a motivated, performance-driven management team, which can push Groupon to new levels. The top-line opportunity ahead of Groupon is massive, and we are drawing inspiration from a transformation playbook. Our main blocker in this respect is our capacity to execute, which really comes down to people. Building a motivated performance-driven management team made up of A-plus players is a necessary condition to achieve our ambition. Compensation is a crucial ingredient in recruiting, retaining, and motivating our team. My desire is to have one of the most pro-performance-oriented compensation programs in all of Nasdaq and use it as an invitation to A-plus players around the world that Groupon can be a great place to build achieve our ambition, and be appropriately rewarded with a piece of ownership in our company. This is why, starting with my new CEO compensation package, we are rolling out a new multi-year performance compensation program for our entire senior leadership team. The main concept we are bringing is that our leadership team should only earn equity in our business if we create sustained value for shareholders above a certain hurdle rate. I simply don't believe our leaders should earn equity in our business solely based on time served. At the same, above a preferred return for investors, I believe our leaders should share in a portion of the upside. While more details of the program are disclosed in our proxy and in my CEO performance share agreement filed along with the CEO announcement in our recent 8K filing, a few principles I want to share here. We have established stock price hurdles that are sufficiently challenging to produce market-beating returns and reflect ambitious growth rates for the underlying fundamental drivers of our business. PSU awards will vest only if both a stock price hurdle requirement and a service condition requirement are achieved. This means if no hurdles are achieved, no shares will vest. Or if a hurdle is achieved but not the service condition, those shares will not vest. As an example, if the 90-day calendar day average stock price reaches $15 a year from now, approximately 8% of the outstanding PSU awards would last. In total, we are currently expected to award roughly 4 million shares to our existing management team equally split into trenches of roughly 1 million shares per each stock price hurdle. We do not expect to issue any time-based restricted stock awards in tandem with the PSU awards to our senior leadership team. And as long as I am leading this company as CEO, I don't anticipate a scenario in which I would ask shareholders for additional shares until our stock price exceeds $70 per share. Please reach out to IR at Groupon.com with any questions. Your vote is important to me and I look forward to receiving your support. Turning around a business like Groupon is tough, and like many entrepreneurial endeavors, there are daily roadblocks and negative data points. But it's important to separate noise from signal. The current Groupon experience on both sides of the marketplace is filled with friction. While customer obsession is a common talking point for many management teams, Groupon has been internally focused for too long, and solving more of our customer pain points will be the key to finding our way to sustain growth. Another big positive I see is the Groupon brand strength. Internally, I was positively surprised to see how many Grouponers bleed green and are committed to making Groupon successful. When I see the emotional attachment our team has to the Groupon brand, how deep that connection is, I feel a lot of admiration and I want to build on this heritage and develop Groupon into something we can all be proud of. And externally, I'm positively surprised by the reactions we have on social networks and influencer posts when a great Groupon deal is being shared. There are so many people who remember, in a positive way, the Groupon brand. Our brand is an asset which will help us in the future. With that, I will turn it over to Jiří.

Thank you, Sean, and thank you as well to everyone who is joining us today. It's a pleasure to be speaking with you. I will use my time today to provide further insights into our first quarter financial results, progress on our cost-saving actions, update on the other business items, and our updated outlook. Turning to slide 11, let's jump into our first quarter summary financial results. In the first quarter, we delivered global billings of $381 million, a decrease of approximately 4% year-over-year. Revenue was 123 million and increased 1% year-over-year, a significant improvement in year-over-year trends versus our fourth quarter results and above the high end of the guidance. Revenue as a percentage of gross billing was 32%, an increase of over 150 basis points year-over-year, and we benefited from favorable variable consideration trends while other sectors were relatively stable. Moving on, our gross profit as a percentage of revenues was 90%, a slight improvement from the prior quarter. Going forward, we expect the gross profit as a percent of revenue to remain in the 87% to 90% range. Marketing expense for the first quarter was $29 million, or 26% of gross profit. Going forward, we expect marketing as a percentage of gross profit to remain within the range we reported over the last three quarters. Adjusted EBITDA was positive 20 million. And we recorded the fourth trade quarter of positive adjusted EBITDA. Our last 12-month adjusted EBITDA has now reached 80 million, a 93 million increase versus our previous 12-month adjusted EBITDA a year ago. Turning to cash flow, first quarter operating cash flow was negative 10 million and free cash flow was negative 14 million, a strong improvement versus last year when we reported free cash flow of negative 86 million. We ended the quarter with 159 million in cash and cash equivalents. Please note that our cash position excludes 30 million of restricted cash, which primarily relates collateral posted against our outstanding letters of credit and reported on our balance sheet in prepaid expenses and other current assets. Slide 12. We had approximately 16 million active customers worldwide as of quarter end, down 0.4 million from the prior quarter. Within North America, our active customer count was down sequentially very slightly. And when you exclude our goods category, our North America active customer grew sequentially. Turning to our local category. Consolidated local billings were $316 million flat compared with the prior year. Within North America, we delivered local billings of $231 million, up 4% compared with the prior year. North America local billings benefited from lava response rate. Including this positive impact, North America local billings would have declined slightly. As an international, we deliver local billings of $85 million, down 9% year-over-year. Moving to our travel categories, in the first quarter, consolidated travel billings were $36 million, up 2% year-over-year. It's in North America we delivered travel billing growth of 30% year-over-year. It's international. Travel still has more work to do with billings down 39% year-over-year. Moving to our goods category. Consolidated goods billings was 29 million, down 36% year-over-year. Our current goods business is traveling, and we do not see any near-term change in the negative terms. At 4% of first quarter revenues and declining rapidly, goods is becoming a smaller and smaller part of our business. Slide 13, turning to operating expenses. First quarter SG&A was $74 million, down 27% year over year, and includes $2 million in stock-based compensation and $5 million in depreciation and amortization. Quarter over quarter, our SG&A was up almost 2 million, or 2%. Driven by increased stock-based compensation, timing related to our cloud migration project, and incremental payroll costs. While we still expect to realize further savings in our SG&A, we expect the timing of these initiatives to be realized in the second half of the year. and expect our second quarter SG&A to be similar or slightly higher compared to our first quarter. Slide 14, turning to free cash flow. In the first quarter, we generated negative 14 million of free cash flow, a significant improvement of 72 million compared to the free cash flow outflow in the first quarter last year. The $72 million improvement was achieved primarily through $26 million improvement in our accounts payables, $24 million increase in our adjusted EBITDA, $13 million improvement in our merchant and supplier payables, $10 million improvement in our operating lease obligations. While the conversion of adjusted EBITDA to free cash flow will move around from quarter to quarter, depending on the timing of our working capital cycle and other cash expenses, we are seeing many of the working capital and cash expense items become more predictable and stable. However, change in merchant and supplier payables is still a major swing factor from quarter to quarter. Evidence by 50 million difference between the first quarter last year to first quarter this year. Change in merchant and supplier payables is driven by the annual change in billings along with quarter over quarter change in billings. Overall, our significantly improved Q1 free cash flow performance sets up well to deliver on our full year guide of positive cash flow. Slide 15. are the business updates. We've completed the following transactions to improve our liquidity position. In first quarter 2023, we received 18.9 million in proceeds from the sale of portion of our stake in Summox. In January 24, we closed a fuller backstop rights offering that was significantly oversubscribed and raised 80 million. In February 24, we prepaid 43.1 million and terminated our credit facility in advance of its maturity in May 24. In April 24, we received proceeds from the sale of non-core intangible assets. In addition to the completed transactions, management continues to evaluate the monetization of certain non-core assets, including the company's remaining stake in SumUp and Github. While there can be no assurances as to whether or when a sale of these non-core assets will be consummated. Management currently believes these future non-core asset sales could generate proceeds of approximately 90 million. Moving to the topic of Italy. On April 15th, we updated investors on a negative ruling related to a tax assessment for one of our Italian subsidiaries, Groupon SRL. Since then, Groupon SRL has temporarily paused the sale of the local vouchers in Italy as we evaluate our options. We continue to believe that the tax assessment is a self-merit and Groupon SRL has been vigorously defending itself in this matter. The best case scenario is we will prevail on the merits of the cost and resume our Italian operations. In the worst case, If we are unable to find a reasonable solution to continue operating Groupon SRL, we will consider an exit of the local business in Italy. Local voucher sales in Italy generate revenues of approximately 1 million euros per month. We do not expect our financial exposure to exceed the assets of Groupon SRL. Slide 16. Now turning to guidance. As of May 9, 2024, management is issuing guidance for the second quarter of 2024 as follows. Revenues between $116 million and $122 million, or a decline year-over-year between minus 10 and minus 5%. Positive adjusted EBITDA between $12 and $17 million. Negative free cash flow, however, we expect it to be better than Q1. Management would also like to reiterate its 2024 outlook that we first issued in November 2023. Year-over-year revenue change at minus five to zero percent. Positive adjusted EBITDA between 80 and 100 million. Positive free cash flow for the full year. Finally, I would like to provide some additional commentary to assist you with your models. As Dušan commented in his script, our platform is facing several technical issues, which has impacted performance in April. While we are confident in our ability to resolve those issues, we expect it will negatively impact our second quarter results and explains why our second quarter guidance represents a step back in our business versus the first quarter. We expect consolidated revenues as percentage of gross billing staying within the range we have reported over the last five quarters. We expect revenues in the first half of 2024 to decline year over year and revenues in the second half of 2024 to grow year over year. The trajectory of the year will depend on a variety of factors, including the delivery of certain projects such as our new consumer front-end. We continue to explore potential changes in without payment methods. Now that our one concern issue is behind us, it's possible that we will rebalance some of the checkout options which we deprioritized last year. Overall, I am pleased with our financial results in the first quarter. While progress in transformation is not always a straight path, I am confident that our transformation plan focused on driving profitable top-line growth can generate attractive returns for our shareholders over the long term. With that, I would like to open the call up for your questions. Thank you.

Thank you. And we will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 a second time. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Again, it is star 1 to join the queue. And your first question comes from the line of Sean McGowan with Roth MKM. Your line is open.

Thank you. Thanks, guys. A couple of questions. Can you give us some sense of progress that you've made on a couple of initiatives that you've talked about in the past, specifically increasing the frequency of Groupons as a gift? And I think more generally than, you know, the process of making the platform more merchant friendly, I think that may be part of what you're touching on in some of these technical glitches you've had. But, you know, taking a step back and say, what kinds of progress are you making towards realizing those two goals?

Okay. Thank you, Sean, for the question. Let me start with the later part. I was mentioning in my script that we released a feature for our merchants with dashboards where they can clearly see the impact of our promotional activities. This was something merchants were asking for for several years and what it provides is that you can clearly see how big additional volume of sales you can get if you provide additional discount. So our merchants in the past were kind of blind from this perspective, and it may have additional impact on them that they know that if they continue with additional promotions, they can sell more and have better visibility. So this is one example. what we are doing in terms of improving merchant experience and now every quarter, every month we will be adding more and more features to this functionality so that it's much easier to manage the campaign on Groupon and achieve the goals which every specific merchant has. In terms of gifting, I don't have any additional specific information about what I was talking about the Last earnings, we covered the Valentine's Day where we see great results. We have Mother's Day ahead of us now. But really the biggest main season for gifting is Q4. So our key focus is to make sure that both product and also the offering, meaning the deals which we have for gifting, will be much, much better for Q4 season. And then maybe the other initiatives which we are focusing on is the regionalization, which is an important part of it. And we also see very, very positive progress of no specific numbers, which I would be able to report right now.

Okay. Thank you. And if I can ask another one there. Dramatic disparity between the performance of North America travel and international travel. I don't think the economic profiles would explain fully that disparity. Can you talk about what would explain the disparity between these two markets?

Between North America and international? And travel, yes. Okay. We have better connectivity in North America. which makes it much easier to plug in some of our partners compared to international. Some features which are available on the NA market are simply not yet available in international. However, I mentioned that we implemented SiteMinder and that platform, for example, will be implemented or is implemented and live now both in NA and on international markets. So it will allow us to put more inventory on international markets and improve the performance of travel also on international markets.

Okay, thank you. I'll pass the number back in the queue. Thank you. Okay, thank you.

And as a reminder, it is star one if you would like to ask a question. And your next question comes from the line of Eric Sheridan with Goldman Sachs. Your line is open.

Thanks so much for taking the question. Maybe a big picture one or two if I could. One in terms of incremental investments on driving platform growth. how would you characterize the opportunity to either be driven by user growth or existing shopper growth and driving more utility or frequency among shoppers on the platform? Which do you think you see as the more fertile ground for return on investment over the next six to 12 months? The second question would be, as you get further along in running the business, what do you see as some of the competitive advantages but also some of the challenges facing the company when you think about the competitive landscape for local services and local goods. Thanks so much.

Thanks, Eric, for the question. In terms of growth and supply, we don't need to grow supply in terms of number of merchants. Actually, I expect that we will go down and we are in the process of removing low-quality merchants. What we need to do is grow number of quality merchants and have the right structure of deals with them so that the deals make sense both for consumers and for merchants. And this is part of our market manager and the sales regionalization process. I still see Groupon primarily as a supply driven marketplace. So this is our main focus in terms of growing the marketplace. But obviously, hand in hand, we should be coming with product which is easier to use, improve the bookability among our deals and do our changes in marketing. To increase the user frequency, I actually believe that we will need to grow some categories which drive frequency like food and drink and similar categories. And here it goes back to improvements in terms of how we are doing the sales. We need to really define the ultimate goal for every deal with the merchant. Because to give you an example, for some deals when you go to the restaurant and you have some upsells like additional drinks, wine, Our current take rate, when you take into account additional revenue, is actually pretty low and vice versa. There are deals where upsell is not expected. In that case, actually, our take rate should be more comparable with Uber Eats and similar. So in order to move ahead in this area, we need to do some product improvements and prepare ourselves to be able to work in this more consultative type of sale. And in terms of competitive advantages and challenges, I see personally Groupon as the best platform to start and grow the business. And yes, we have competitors. You can even take Google and Facebook and wear sponsored products, adverts as a competition. But Groupon... really is performance-based, meaning that merchants are paying Groupon only if we deliver them to customers. I think it's a big advantage. We cover pretty much all verticals. We have some other vertical marketplaces as competitors, but no one is doing the whole scale. And I see this combination of this performance approach, great advantage, and being Groupon is a great partner for local businesses.

Thank you.

And your next question comes from Sean McGowan with Roth MKM. Your line is open.

Thanks again for a follow-up opportunity here. I meant to ask earlier on travel. You talked about some of these glitches maybe not being worked out until the end of the second quarter. I don't know if you're talking specifically about travel, but do you think travel could get back to the Q1 level by Q3?

Yes, I think we have a decent chance to get to similar levels.

Okay, that's helpful. And did you mention either on this call, I don't think you did, or in a filing, how much you got for the sale of those intangibles?

No. Well, there is... Confidentiality about this deal and everything about this deal is contained in note two of our earnings disclosure. And sorry, we cannot disclose more. Thank you.

Okay. But when you mentioned in the prepared remarks about the $90 million, that does not include what you already got, right?

No. Yes, correct. This is what we still have, what we believe we can get from other non-core assets. primarily this cloud and some of the remaining stages.

Great. Thank you very much. Appreciate it. Thank you.

And there are no further questions at this time. And this will conclude today's call. We thank you so much for your participation, and you may now disconnect.