Versant Media Group, Inc.

Greetings. Welcome to Versant Media's second quarter of 2026 Operating on Financial Results conference call.

At this time, all participants are in listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero from your telephone keypad. Please note that this conference is being recorded. I'll now turn the conference over to Wylie Collins, Executive Vice President of Treasury and Investor Relations. Thank you. You may begin.

Thank you and good morning, everyone. Welcome to Versant Media's second quarter 2026 operating and financial results conference call. Joining us today are Mark Lazarus, Chief Executive Officer, and Anand Kini, Chief Financial Officer and Chief Operating Officer. Also with us are Jordan Fasbender, General Counsel, and Natalie Candela, Vice President of Investor Relations. Before we begin, I'd like to remind you that certain statements made during this call may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements reflect management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. For discussion of these risks and uncertainties, please refer to Versant Media's filings with SEC in today's earnings release. All forward-looking statements are made as of today, August 6, 2026, and we undertake no obligation to update them. In addition, we may refer to certain non-GAAP financial measures. Thank you for joining us.

Thank you, Wylie, and good morning, everybody. Our second quarter results reinforce the strength of our portfolio and the strategy that we're executing. To win with premium live content, extend the reach of our iconic brands, and accelerate growth across our platforms. Across news, sports, and entertainment, our brands continue to grow audiences and engagement while delivering value for viewers, advertisers, and our distribution partners. Our TV portfolio now reaches more than 120 million viewers each month, with double-digit audience increases in aggregate across our networks. We also recently completed multi-year renewals with two large pay TV distribution partners, one in the U.S. and one in Canada, further highlighting the value of our portfolio. That strength gives us confidence to invest where we see the greatest opportunities, growing our digital platforms advancing our direct-to-consumer offerings and deepening our audience relationships. Together, these investments extend our audience reach and build upon the foundation of our iconic, highly cash-generative brands. Our performance this quarter demonstrated our strong execution of this strategy across the portfolio. Let's walk through a few of the highlights. CNBC reinforced its position as the leading global business news brand. During market hours, the network ranked among the top 10 cable networks for the fourth consecutive month and delivered its highest-rated quarter in more than five years. Coverage of the SpaceX IPO drove CNBC's highest-rated day during that same period. CNBC continues to generate the most affluent and educated weekday, daytime audience in all of television, a distinction it has maintained for 27 consecutive quarters. The network also featured exclusive interviews with business leaders and policymakers, including Jeff Bezos, whose appearance generated more than 100 million video views across all platforms. MSNOW also built on its momentum, delivering its seventh consecutive month of audience growth in TV and expanding its reach on digital platforms. In June, viewers watched an average of nine hours each week, the second highest level of engagement across all of television. and MS Now saw a 14% increase in viewership in the second quarter versus last year. That momentum extended well beyond television. Year to date, the network generated nearly 3 billion combined YouTube and TikTok views and in June ranked as the number one news organization on YouTube. Podcast engagement was also healthy with more than 11 million audio downloads during the month. In July, we celebrated MSNOW's 30th anniversary, an important milestone for one of the country's leading news brands. MSNOW continues to accelerate. Golf Channel also had an outstanding quarter. PGA Tour coverage delivered the network's most watched second quarter since 2020, with comprehensive coverage across all of golf, including the Masters, PGA Championship, U.S. Open, and PGA Tour and its signature events. In sports and entertainment, USA remained a top-five entertainment network among key demographics, extending a track record of leadership spanning more than three decades. Live sports continued to drive large, highly engaged audiences. In the WNBA's first season on USA, the network aired the three most watched games across cable and streaming, while League One Volleyball increased viewership over its inaugural season, and the WWE continued to deliver large audiences. We're investing in sports where we believe we can create long-term value. Last month, we announced a five-year agreement with the Bundesliga, one of Europe's most renowned soccer leagues, known for passionate fans, iconic clubs and athletes, and global appeal. Beginning this season, we will broadcast more than 300 live matches annually, with at least 30 premium matches airing on USA Network and all remaining matches streaming for free on Fandango.com. This agreement builds on our year-round sports offerings, expands our reach with soccer fans, and creates more opportunities to engage audiences across platforms. In addition to Bundesliga, the start of our NASCAR Cup Series coverage on USA Network begins this Sunday and the return of the Premier League later this month provide a strong lineup of live sports as we enter the second half of the year. In entertainment, we're driving viewership with a balanced portfolio of original programming and proven franchises. Our strategy is to build brands that engage audiences across multiple platforms for years to come. And that strategy is delivering results. Everything on the menu saw double digit ratings growth in its second season. And we're excited to build on that momentum with our next generation of originals, including Anna Pigeon and The Golden Life, set to premiere this month and fall, respectively. Thank you for joining us. Broad connected TV distribution, rich first-party data, and unique and exclusive content, most recently with the addition of the upcoming live Bundesliga matches. The Fandango platform we're creating is anchored by a differentiated core business, as demonstrated by healthy ticketing volume growth. In any given month, 50 million consumers visit either Fandango or Rotten Tomatoes to decide what to watch. Together, these platforms enjoy loyal customer relationships and support our long-term growth strategy. Golf Now realized broad-based growth, including domestic rounds booked, global course relationships, payments volume, and golf pass subscribers. We are further strengthening our leadership in golf and platforms with the acquisition of Full Swing. Full Swing is a leading sports technology company serving one of the fastest-growing segments in the golf industry. Thank you for joining us. We believe there is meaningful upside in this market. Today, there are 38 million U.S. off-course golfers, exceeding the number who play on traditional courses. And since 2019, the number of off-course golfers grew more than 60%, and simulator golfers grew by more than 150%. More importantly, Full Swing will expand our golf ecosystem by broadening our relationship with the golf community. Together with Golf Channel, Golf Now, and Golf Pass, we are uniquely positioned to connect premium content, commerce, technology, and participation, creating more ways to engage golfers throughout their journey. There are also additional opportunities beyond golf, including baseball, where Full Swing's technology is already used by both college and professional teams. We are also advancing our direct-to-consumer strategies around MS Now, which will launch its direct-to-consumer experience ahead of the midterm elections, giving audiences new ways to engage with its hosts, programming, and community, while deepening engagement, strengthening the brand's relationships with viewers and fans. and at CNBC we're developing a next-generation digital platform that will combine CNBC's trusted journalism, exclusive access to leading voices in business, and AI-powered investing tools to become a premier destination for investors. Taking a step back, our accomplishments this quarter reinforced what we've believed since becoming an independent company just over seven months ago. We continue to deliver premium content that expands our audiences, drove compelling results across pay TV and platforms, renewed distribution agreements with valued partners, and advanced a strategic initiative that will further strengthen our leadership in golf. Looking ahead, we'll continue to invest where we see competitive advantages and clear returns, extending the reach of our brands while creating long-term value through scalable platforms. Today's announcement of an additional $100 million accelerated share repurchase program alongside our quarterly dividend reflects our commitment to returning capital to shareholders, the enduring strength of our business, and the confidence in the opportunities ahead. With that, let me turn it over to Anand.

Thanks, Mark, and good morning, everyone. Our second quarter results reflect another quarter of disciplined execution of our strategy and progress toward our financial objectives. We delivered EBITDA growth, strong margins, and meaningful free cash flow while continuing to invest in the business to drive growth. Based on the strength of our first half performance and our expectations for the balance of the year, we are raising our full year outlook for revenue from $6.15 to $6.4 billion to $6.2 to $6.45 billion, and for adjusted EBITDA from $1.85 to $2 billion to $1.9 to $2.05 billion. On free cash flow, we are maintaining our prior expectation of $1 to $1.2 billion to account for natural quarterly fluctuations in working capital timing. Turning to our results, total revenue for the quarter was $1.64 billion, a decline of 4% compared to the prior year. Excluding the impact of the sports engine divestiture, revenue declined 3%. Our performance reflects the resilience of our brands, strong audience engagement, and continued momentum in platforms mitigating the secular changes in pay TV. Turning now to the components of revenue, linear distribution revenue was 954 million, down 6% year over year, reflecting subscriber declines that were partially offset by contractual rate increases. These trends were consistent with the prior year's performance. Advertising revenue was $423 million, reflecting a slight 0.6% decline year over year compared with a 13% decline in the prior year period. The improvement was driven by strong demand across our news and sports portfolio, favorable network ratings, and additional revenue from our acquisition of free TV networks. Platforms was the fastest growing part of Versant, with revenue increasing to $225 million in the quarter and continues to play an important role in evolving our revenue base. Excluding the impact of the sports engine divestiture, revenue increased 9% driven by momentum at both Fandango and GolfNow. Fandango generated solid growth in tickets sold, video on-demand transactions, and sales of our new cinema operating platform, while GolfNow delivered increases in U.S. bookings, payments processed, and golf pass subscriptions. We're encouraged by the performance and continued progress in scaling platforms. Content licensing and other revenue was $43 million, which was flat year over year following the sharp uptick in the first quarter. As we've discussed previously, this category can fluctuate from quarter to quarter based on the timing of licensing agreements. We view content licensing as a growth area over time as there's continued demand for our own programming and library. Just at EBITDA for the quarter was $624 million, an increase of 3%, and reflects the breadth and depth of our audience, continued platforms growth, and disciplined expense management. Our margins remain above 30%. Turning to expenses, we are focused on managing costs while investing behind our strategic priorities. Programming and production costs were $522 million, down 9% from prior year, as we continue to deliver premium content in a cost-efficient manner. Programming costs fluctuate throughout the year, largely based on the timing of sports events. As we shared on the first quarter call, we expect sports rights costs to meaningfully increase in the second half, further impacted by an increase in NASCAR races this year, our first season with the WNBA, and golf events. Each of these reflects the strength of our sports portfolio and breadth of audience. In light of this, we expect second half programming costs to increase year over year, and in turn, and Jesse Dibita for Q3 and Q4 is unlikely to demonstrate growth versus the prior year. Other costs of revenue were $128 million, $1 million higher than in the prior year quarter. Increased costs due to higher transactional volumes related to our digital platforms and from our acquisition of Indie Cinema, now rebranded Fandango One, were largely offset by decreased costs from our divestiture of sports engines. Total cost of revenue, representing the sum of programming and production costs and other costs of revenue, or $650 million, down 7% from the prior year. Selling general and administrative expenses were $369 million, a decrease of 8% compared to the prior year. Looking ahead, we expect modest increases in SG&A as we support our growth initiatives, including the development of the upcoming MS Now and CNBC direct-to-consumer offerings. We are focused on identifying efficiencies across our organization that will benefit 2026 and beyond, such as by optimizing our infrastructure and deploying technology to streamline workflows and improve productivity. Finally, with regard to cash generation, liquidity, and capital allocation, free cash flow totaled $350 million during the quarter. As we've noted before, the timing of working capital and tax payments can create quarterly variability in free cash flow. And we anticipate higher CapEx in the second half of the year, largely associated with construction at our New York office facility. As with adjusted EBITDA, we continue to anticipate that second half free cash flow will be lower than the first half. Despite these timing distinctions, our business model delivers strong cash conversion on an annual run rate basis. We ended the quarter with approximately $1.5 billion of cash, which, together with our strong free cash flow generation, supports our capital allocation priorities of investing in the business, returning capital to shareholders, and maintaining a strong balance sheet. Demonstrating our commitment to returning capital to shareholders, we repurchased $100 million of stock in the second quarter under the previously announced accelerated share repurchase transaction. Through today, we have returned $305 million to shareholders this year through $200 million of share repurchases and $105 million in dividends. This morning, we also announced our intention to commence an additional $100 million ASR during the third quarter. At the same time, we're deploying capital into long-term growth areas with investments in the MSNOW and CNBC DTC offerings, the Fandango AVAD, and on disciplined M&A, such as the recent acquisition of Fullswing. We believe Full Swing, with its clear alignment and synergy with our leading golf brands, will generate attractive financial returns and value for shareholders. In the second quarter, we executed and advanced our strategic priorities with financial discipline, positioning us well for the balance of the year and beyond. And with that, I'll turn it back to the operator for Q&A.

Thank you. We'll now be conducting a question and answer session. If you'd like to ask a question, please press star 1 from your telephone keypad. and a confirmation tone to indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star keys. Thank you and our first question comes from the line of Peter Cipino with Wolf Research. Please receive your questions.

Hi, good morning all. I wondered if you could discuss your affiliate renewals and what, if anything, about those negotiations was different then the tone of negotiations under Comcast. And then I also, if you could answer a second question, it'd be about the direct-to-consumer expansions of MSNOW and CNBC. I wonder what data or perspective you might have on the latent demand for those brands outside of the pay TV subscriber base of today. Thank you.

Thanks, Peter. So I'll touch on the affiliate side. We did some deals while we were still part of NBCU in 2025, and then we have a few deals up this year. There was really no change in how we approached it or how the distributors approached it. We had very similar conversations. It was really about the value of our brands, the strength of our brands, and what it does for them to keep their subscribers happy. The fact that we have a lot of live news and sports, we have some strong entertainment content, and that we are able to deliver audiences to our distribution partners made this conversations quite similar to anything we've experienced in the past. So really, I mean, I'll call it business as usual. It was different because we were a different company, but very similar conversations. and I think we had outcomes that both we and the distributors feel very good about that have long-term partnerships. As it relates to the D2C, MS and CNBC are very strong brands with highly engaged audiences. We are creating direct-to-consumer products, not streaming products because they are It is a much broader than just streaming what we do on television. It is about serving those engaged audiences with content that is not just replicative of what we do on television. So the strength of MS's highly engaged audience, already watching nine hours a week of our network, but also the size and scale of the audience that may or may not be watching us each and every day who's interested in the point of view that MS has, I think we will be able to have a strong marketplace as we enter it. CNBC already has direct-to-consumer businesses. We know that there's a demand. We're simply reimagining and making them stronger and creating a destination for retail investors with a toolkit.

Yeah, and just to add on, Peter, there's a couple kind of indicators, too, to just reinforce what Mark said. So we've mentioned before that MS has one of the biggest YouTube and TikTok presences. So like outside of pay TV, we're already amassing big audiences. We have a big live events business that CNBC's had for some time and MS now has as well. And then also we have two publishing businesses, kind of the website and the apps. for both MS and CNBC that are amassed big audiences as well. So it's kind of everything Mark said. It's also, it's not like both the CNBC subscription services and all those other things I just mentioned demonstrate there's a lot of appeal for those brands and for those businesses outside of pay TV.

Good stuff. Thank you.

Our next question comes from the line of Michael Ng with Goldman Sachs. Please issue your questions.

Hey, good morning. I have two questions as well. Just the first on Sports Engine and Full Swing. Very encouraging to see the upgrade in revenue in EBITDA despite the disposition of Sports Engine, which I think is about a $90 million headwind to full-year revenue. But my question is, how much of the guidance increase was related to Full Swing contributions kind of net of the sports engine disposition versus improvements in the underlying business. And then secondly, I was just wondering if you could talk about the ASR and what that means for your appetite for additional M&A, if there's any relationship. Thank you.

Sure. Thanks, Mike. So on both questions first, let me start with the guide or guidance and your point on full swing. Just to be very clear, our update and guidance is not because of the acquisition of Full Swing. As you know, we're getting a partial period here, given we just closed the acquisition, and we looked and we established taking our outlook up was based on the entirety of the portfolio. As you know, there's a lot of ins and outs, as you just mentioned, the sports engine divestiture, that comes out. and so forth. Full swing comes in. No, it was not because of that. It was just much more reflecting the confidence we have in the business going forward, not only second half of the year, but going forward after that. All the results we just talked about, the momentum we have in the first half and we see that continuing. On the second question on the ASR and M&A, I think we view our capital allocation policy, and I think we've demonstrated that, and we're going to continue to demonstrate it, is that these are ands, meaning we're going to invest to grow the business, we're going to return capital to shareholders, and we're going to maintain a healthy balance sheet. And I think this quarter, we executed the full swing transaction, and we're kind of again returning capital to shareholders. in terms of the dividend and share buyback demonstrates that and our balance sheet remains very healthy. So that principle is what we're going to continue to run this business on kind of now and going forward.

Great. Thank you very much.

Very clear. The next question is from the line of Rich Greenfield with LightShed Partners. Please receive three questions.

Hey, guys. Thanks for taking the question. I bought a new Sony TV the other day, and when I was setting it up, I had like, I don't know, 10 or 15 apps that were pre-installed that had asked me whether I wanted to add to my new TV setup with Google TV. And Fandango, interestingly, was one of those 15, along with other very much more high-profile apps, which certainly surprised me. And you've rolled out this Rotten Tomatoes app. and you announced a Fandango kind of AVOD to sort of take on what Tubi's done. Now we've got Pluto replicating Tubi with On Demand. It seems like there's like some larger strategy that you're kind of noodling on around the movie entertainment business and how you monetize it, similar to sort of the golf vertical that you've gone really deep in or the finance vertical that you're going deeper and deeper into. I guess I just, you know, could you sort of lay out like what you're thinking vision-wise or are there assets that you need to acquire to build this out? Is it all internal? Just give us sort of a peek into what you're thinking about because I feel like there's something there.

Sure, thanks. I hope you clicked yes and installed that.

I did, Mark. I did click yes. I did. I did.

I promise. Thank you. So, you know, listen, we start with Fandango as a very strong brand, right? And it's been widely known mostly as a movie ticket buying service. So we start with a strong brand, and as you just experienced and articulated, a large install base in the connected TV world. It pre-exists. That's a strong base to start on. Where we aspire to move this, and we touched on it in our remarks, is to really create a comprehensive entertainment platform where consumers under one brand can find out where movies are, buy tickets to theaters, rent or buy films or TV series, watch for free at home with differentiated and exclusive content. Rotten Tomatoes, it's really a great discovery platform. We have 50 million people coming through the Fandango or Rotten Tomatoes door in any given month, and the ability for us to expose them and transact with them on all three of those levels, free AVOD, buy or rent TV and movies, or purchase movie tickets, we think is unique that we have all three of those wrapped into one. The strength of our ability to work with all studios as an independent company we think is also unique as others dabble in a variety of those areas.

What differentiates you from Pluto or Tubi? I mean, there's a lot of players. Disney yesterday said they're launching an AVOD service. Paramount said they're thinking of it for Paramount Plus. What makes Fandango unique from a product standpoint?

I think some of the main pieces, some of it will end up being content for each of us and I think our deal with the Bundesliga where 270 Bundesliga matches will be exclusive to Fandango Stream gives us a unique selling proposition. But more broadly than just content, I mean we have some deals and windows for movies and TV series. Content will be one, but everyone will have an angle on that. I think our ability, because of the transactional business around movie tickets and buying and renting films and TV series, our ability to target content and target advertising will be distinct. Again, that, I think, attached to our large install base and our independence away from all studios and our ability to work with all studios, it gives us a clear advantage. Thank you. Thanks, Rich.

The next question is from the line of David Carnison with J.P. Morgan. Please receive your question.

Good morning, thank you. Your linear distribution growth firmed a bit relative to last quarter. Is this seasonality better trends on pay TV or something specific to your deals? And second question, can you discuss the better trends in advertising? What networks are driving this? Is it mainly about ratings? The release also mentions the recent acquisition, which we assume is free TV networks. Can you maybe frame the contribution and how that's performing to date.

Thank you. I'll take the first one on the linear distribution. We have long-term deals with most of the operators or all the operators. We just finished two more. We are not blind to the normal headwinds that everyone in the industry is facing, but we are able to strike deals that allow us to mitigate some of those headwinds, and then the rest of that mitigation will come by our capital allocation and investing in our businesses, both organically and with strategic and disciplined M&A. So again, not blind to what's going on in the distribution world, but we are able to, our strategy is to be able to mitigate that, and we believe we're making significant headway.

Great. And on the advertising question, a couple things. The strength was pretty broad-based. Now, we have talked a lot about the power of one of our kind of hallmarks is we have a very sports and news and live event-focused kind of programming. It's about 60% of our audience. That's the kind of programming that's resonating very well. Mark went through the rating success we've had kind of across the board, a lot of it in those areas. And with that engagement, it has a lot of demand for marketers. So I think that's a big driver. So it's pretty widespread in terms of there's not one specific network or asset that's driving our strength and we're proud. It's broad-based. Second part is in terms of an acquisition, adding to it, and the business here is Free TV Networks. The underlying organic growth is what kind of drove the trend improvement. So sure, free TV networks is a business we really like and it's contributing, but that's not the driver as to why you saw the significant improvement from the prior periods.

Great, and maybe a follow-up on Bundesliga rights. It's a novel approach to use sports mostly for a fast channel. Can you speak a bit to your strategy here?

For us, and it was a unique opportunity to work with them, we've had a lot of success over the years in our previous experience, but even continuing in as Versant with the Premier League and with sports to drive adoption of platforms. The Bundesliga was an opportunity that we saw to create at scale live sports content a significant number of hours, six or seven hundred hours of live sports and be able to both serve our pay TV customers with premium matches on USA and create a new marketplace for ourselves in free AVOD and bring in a new group of people who may not have experienced Fandango for the services and the content that sits there now but trying to build circulation and Sports has been one of those things in the industry that has done that, and we decided that this was a smart investment in a sport that we know has a very loyal and engaged fan base.

Thank you.

Our next question is in the line of David Joyce with Seaport Research Partners. Please proceed with your questions.

Thank you. Just a little bit more on the pending direct-to-consumer launches. Given that there's a lot of fluidity in bundling, packaging, platforms, integrating other third parties, entities, what is your view on your strategy there? Would you be looking to partner to help drive the subscriptions? How much do you want to lean into Peacock since they do need some more scale? And then also on the advertising side, what are you doing to help with the NBC ad sales thing and when would you want to be taking that back in-house? Thank you.

So on the D2C, we're going to launch them independently to start. We do have some of our deals with our MVPD and partners allows for us to be bundled into what they're doing for customers. And we think that's an opportunity to quickly gain more subscribers and usage. So we are open and having active discussions across the industry on where bundles might make sense. We think it's one of the advantages that we have as a new independent company as we're not beholden to any specific company for distribution. We can work with any and everyone, and I think over time you will see us doing just that.

I think the next one's on working on the CSA and advertising.

Oh, on the CSA. Sorry, I lost track. So our deal with NBC has been going very well, and I think if you looked at the advertising trends of what we're seeing, it's hard to deny that. So we've had a very strong relationship there. It does have a time. It was a two-year deal. At the appropriate time, both sides will determine whether it makes sense to continue on or whether we should make another arrangement plan or do it ourselves. But for right now, we're very much focused on partnering with them. They've been great sellers and stewards of our brands. We're going to support that and together we'll sit down with them and each party will determine if it's in our best interest. months if not a year away from that determination.

Appreciate the color. Thank you.

Yes, thanks.

Thank you. Our last and final question is from the line of Brent Penter with Raymond James. Please receive your questions.

Hey, good morning, everyone. Thanks for taking the questions. First one for me, what's the biggest synergy opportunity you see in full swing? Clearly, it fits within a portfolio of golf businesses. but can you just help us understand in practical terms what are the biggest benefits by being under the versant roof?

Yeah, I think quite simply first, you know, golf participation is growing. Our golf ecosystem of Channel Golf Now and Golf Pass, you know, we can really accelerate the adoption. It comes in a couple of forms, right? First will be just market. We'll be able to market the product to commercial entities and to consumer users very simply through Golf Channel, Golf Now, and Golf Pass. Second big piece would be we have a massive Golf Now sales force who talk to golf courses and golfers every single day and they will now have another product that they can sell into those establishments So those are things that full swing, as successful as it is and excited as we are, we can instantaneously add to their exposure and their sales team. And so we're very excited about that sort of opportunity. And oftentimes in M&A, people talk about synergy being about cost. For us, this is about revenue synergy.

Got it. You all continue to execute on these M&A opportunities. Is there a limit on size you're willing to entertain for M&A? Mark, earlier you used the word disciplined, and you all have been committed to leverage levels. But if something larger comes up, what's the willingness either through the balance sheet or through equity to take advantage of that?

So I think it's So on the question, Brent, we've been, as Capital Allocation, we've talked about our leverage, you know, 1 to 5, that ratio being our North Star. So anything we do, if we were to be below or above it, you would expect it, and we expect ourselves to kind of get back to that in relatively quick order. I think, again, that question about we would never say we're going to exclude considering something. It would have to go through our discipline process, make sure it adds value to shareholders, that we're going to be a great buyer. Some of the synergies, for example, that Mark talked about in Full Swing, we look at that about the unique value we add on any potential deal we do. Then in terms of capital structure and capital allocation, again, it's going to have to align with those three principles about growing our business, evolving our business model. enabling us to maintain a healthy balance sheet and most importantly driving value to shareholders and enabling us to return capital to shareholders as well.

And I think hopefully we've proven that and we have capacity because of the way we've managed to date.

All right. Thanks, guys.

Thank you.

Thank you. Ladies and gentlemen, thank you for participation. This does conclude today's teleconference.

You may now disconnect your lines at this time and have a wonderful day.