Entravision Communications Corporation

Q3 2022 Earnings Conference Call

11/3/2022

spk07: Good day, good evening, and welcome to the InterVision third quarter 2022 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star, then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Kimberly Esterkin, Investor Relations. Please go ahead.
spk00: Thank you, Operator. Good afternoon, everyone. and welcome to EnterVision's third quarter 2022 earnings conference call. Joining me today are Walter Ulloa, Chairman and Chief Executive Officer, and Chris Young, Chief Financial Officer. Before we begin, I must inform you that this conference call will contain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ. Please refer to EnterVision's SEC filings for a list of risks and uncertainties that could impact actual results. This call is the property of Entrevision Communications Corporation. Any redistribution, retransmission, or rebroadcast of this call in any form without the express written consent of Entrevision Communications Corporation is strictly prohibited. Also, this call will include non-GAAP financial measures. The company has provided a reconciliation of these non-GAAP financial measures to their most comparable GAAP measures in today's press release. The press release is available on the company's website and was filed to the SEC on Form 8K. In addition, all pro forma figures, including revenue, operating expenses, and consolidated adjusted EBITDA, noted throughout the prepared remarks, include the contributions of various acquisitions and investments in the prior year period. I will now turn the call over to Walter Ulloa, Chairman and Chief Executive Officer.
spk01: Thank you, Kimberly, and good afternoon, everyone. We appreciate you joining us for EntraVision's third quarter 2022 earnings call. EntraVision's solid performance in the third quarter and year to date demonstrates the resiliency and growth of our business in a tough macro environment. As we continue to strategically expand our operations throughout the globe, we now have a presence in 40 different countries across five continents. Net revenue for the third quarter totaled $241 million. up 21% year over year. On a pro forma basis, revenue increased 17% over the prior year period. The continued growth of our digital segment combined with strong political advertising revenue in our television and audio businesses were the main drivers for our third quarter performance. When the nine months ended September 30th, 2022, revenue totaled 659.9 million, up 25% year over year. Similar to the quarter year to date, revenue benefited from growth in our digital segment, as well as strong political advertising revenue in our television and audio businesses. Consolidated adjusted EBITDA totaled $26 million for the third quarter, up 12% year over year. Similar to the first two quarters of the year, in the third quarter, we lacked $5.5 million of non-returning revenue due to three discontinued Univision affiliations, than we had in the prior year same period in our television segment. Additionally, like many other multinational companies, due to the strength of the U.S. dollar, we experienced a currency impact during the quarter of $2 million. What is so remarkable about our third quarter EBITDA is that despite these two headwinds, we still managed to go EBITDA 12% in the quarter. Additionally, if we include the $2 million impact of foreign exchange rates during the quarter, adjusted EBITDA on a constant currency basis improved 20% compared to the prior year period. The nine months ended September 30, 2022, consolidated adjusted EBITDA totaled $66.6 million, up 21% year over year. Expense management undoubtedly drives this EBITDA growth while also contributing to our ability to provide returns to our shareholders. Speaking of shareholder returns, I am pleased to announce that our board of directors approved a cash dividend of 2.5 cents per share payable to shareholders on December 15th, 2022. With that as a background, now let's take a look at each of our segments performance for the third quarter, beginning with our largest digital. I'm pleased to report that for the third consecutive quarter, all of our digital units delivered solid revenue growth and positive operating margins. Digital segment revenue represented roughly 78% of consolidated revenue for the third quarter and totaled $188.9 million, up 29% year-over-year. Top quarterly achievements for the segment included a continued expansion of our client base into additional territories, particularly through our Meta, Spotify, and TikTok partnerships. The growth of our operations in the various continents and strong results in mobile through our DSP and mobile user acquisition business, Smatics. As we discussed on the last call, our mission for our digital segment is to continue building a global marketing sales operation in emerging territories, where a critical mass of connected consumers exists alongside a large and growing advertising industry. We continue to expand our digital operations across continents, both organically and through strategic tuck-in acquisitions. At present, EnterVision's digital operations service over 7,000 clients, for whom we provide two main offerings, marketing solution services that focus on strategic commercial representations with companies such as Meta and Spotify, and mobile user acquisition, including branding, performance, and programmatic services to top app publishers around the world. I'd like to provide an update on our progress in each of these areas, beginning with our commercial representation business, Latin America. This business was formerly known as Entrevision Cisneros Interactive, and is now referred to as Entrevision Latam. This business delivered solid results for the third quarter, with revenue increasing approximately 11% over the prior year period, driven largely by our commercial representation partnerships with Meta and Spotify. With a track record of strong performance, we believe that our partnership with Meta is strong and poised for continued growth throughout the globe. Beyond Latin America, EnterVision Media Donuts in the Southeast Asia region was also performing strongly during the quarter, with revenue improving 75% year-over-year. Revenue growth was largely driven by EnterVision Media Donuts' success with Twitter and TikTok, along with strong mobile acquisition performance. Also in the Asia region, in August we closed our previously announced investment in Jakob Digital, the exclusive commercial partner of TikTok in Pakistan. Jackup Digital taps into a market of over 100 million connected consumers and is part of a vibrant emerging economy with strong advertising spend. Just recently, Jackup Digital released what the digital advertising industry is calling one of the best TikTok campaigns of all time in Pakistan. TikTok then featured this particular campaign on their inspiration page. In Africa, EnterVision 365 Digital revenue in the third quarter increased 151% year-over-year on a pro forma basis. In October, after the end of the third quarter, EnterVision 365 Digital became the official authorized sales partner of Meta in Ghana. Here, EnterVision 365 Digital will provide training, lines of credit, and billing for advertisers, reinforcing our commitment to connect brands to consumers through local strategic support. Our operations in Ghana are just getting started under newly appointed country manager Stephen Sawyer, a local digital advertising veteran who is very well equipped to build a world-class team for AntriVision in West Africa. Last but not least is Smatics. our mobile user acquisition programmatic ad tech platform, headquartered in Barcelona, Spain. Smatics performed extremely well during the third quarter, with revenue improving an incredible 141% year over year. We continue to be excited about this proprietary programmatic platform. This growth was driven by specialized sales teams by industry, a strong geographical presence, and notable technological performance. Now let's turn to our television segment. which comprised 15% of revenue for the third quarter. Television revenue was $35.7 million in the third quarter, down 2% compared to the prior year period. This decline in revenue was anticipated primarily due to the discontinuance of three Univision affiliations, Washington, D.C., Tampa, and Orlando at the end of 2021. Excluding those three affiliate markets, Total television revenue was up 14% year-over-year, excluding those three affiliate markets, and $6 million in incremental political spend in the third quarter. Core television advertising revenue decreased 9%. National core advertising revenue decreased 14%, and local core advertising revenue decreased 6% year-over-year. Although the television market is choppy, strength in our political advertising revenue is more than making up for core broadcast revenue. following a strong third quarter in which we generated $7.9 million in political ad sales for the company. We now expect full-year political ad revenues to be approximately $30 million, up from our prior expectations of $17 to $19 million for the year. This impressive performance was primarily driven by the Nevada and Arizona elections, along with the South Texas congressional races impacting McAllen and Laredo. Looking at other ad categories, excluding the three discontinued Univision affiliations. Auto ad revenues were up 3% in the third quarter year-over-year, propelled by the Tier 2 auto segment, which improved by 15% versus the prior year period. Media and entertainment was up 3%, and retail was up 14% compared to the third quarter of 2021. Even more impressive were the finance and beverage categories, which improved 86% and 419% respectively year-over-year. With regards to our ratings performance during September 2022 for adults 18 to 49 and early local news, our Univision television stations finished ahead of their Telemundo competitor in nine of 14 markets plus two ties. In late local news, we finished ahead of Telemundo competitors among adults 18 to 49 in six of 14 markets plus two ties. Additionally, our early local newscasts are ranked number one or two against English and Spanish competitors in nine markets, including ties. For late local news, our newscasts are ranked number one or two against English and Spanish competitors in eight markets, including ties. Furthermore, the Telecast for Univision's Premios Juventud Awards show this past July was again among the top five programs in the time period in 14 markets among adults 18 to 49 and adults 25 to 54. Lastly, our audio segment, which comprised the remaining 7% of third quarter consolidated revenue. Audio revenue totaled approximately $16.5 million for the third quarter, consistent with the prior year period, excluding incremental political spend of $914,000 in the third quarter of 2022. Core audio revenue decreased 6% versus the third quarter of 2021. With regards to advertising categories, our local audio teams saw growth versus the prior year period in the following categories. Travel and leisure, telecom, retail, finance, product brands, and grocery. Auto advertising continued to struggle and declined 3% year-over-year, with Tier 3 auto local car dealerships seeing slight growth for the quarter and up 2% year-over-year. Looking at our audio segment ratings performance for the summer book among Hispanic stations, the Erazo y la Chocolata show is ranked number one in PM Drive. in six out of our nine markets released for summer among Hispanic adults 18 to 49 and Hispanic adults 25 to 54, including ties. Across our nine O and O stations, the Erazo y la Chocolata show reached more than 450,000 Hispanics 25 to 54. Just last month, Entrevision obtained exclusive syndication selling rights to the Erazo y la Chocolata show beginning this upcoming January. El Show de Hidrazno y la Chocolata has been on the air for 18 years. It has syndicated 97 cities coast to coast with an average of 2.3 million weekly listeners, or roughly 64% of the Hispanic listenership base. We are thrilled to obtain the exclusive rights to a radio show featuring one of the most influential Hispanic radio personalities today. Before speaking further, I will turn the call over to Chris Young, our CFO, to discuss our third quarter performance in future detail and provide our fourth quarter pacings. Chris?
spk03: Thank you, Walter, and good afternoon, everyone. As Walter discussed, revenue for Q3 2022 totaled $241 million, an increase of 21% from the third quarter of 2021. For our digital segment, revenue totaled $188.9 million in the third quarter, up 29% year-over-year, and up 24% on a pro forma basis as compared to Q3 2021. For our TV segment, total revenue was 35.7 million in the third quarter, down 2% year-over-year. Excluding political, core advertising revenue was down 19% year-over-year. However, excluding the revenue impact from the three discontinued Univision affiliates, total revenue increased 14% year-over-year. Retransmission consent revenue for the quarter totaled 8.9 million, which was down 2% year-over-year, mainly due to the discontinued Univision affiliates. Lastly, for our audio segment, revenue totaled $16.5 million in the third quarter, which was flat year over year. Excluding political, core audio revenue was down 6% over Q3 of last year. Operating expenses in the third quarter of 2022 totaled $49.3 million, up 14% from $43.1 million in the prior year period, primarily due to our variable expenses related to revenue growth and increases in salaries. Corporate expenses increased by 31% to $9.5 million for the quarter compared to $7.3 million in the same quarter of last year. The primary drivers were increases in non-cash stock-based compensation expenses, salaries, and legal expense. Consolidated adjusted EBITDA totaled $26 million for the third quarter, up 12% from $23.2 million in the prior year period. As an increasingly global business, Entrevision now has more exposure to foreign exchange risk as we bill a portion of our clients in certain countries in their local currencies. Given this, if we account for the $2 million impact of foreign exchange rates during the quarter, adjusted EBITDA on a constant currency basis improved 20% compared to the prior year period. Free cash flow as defined in our earnings release was $15.4 million compared to $22.4 million in the prior year quarter, or a conversion rate of 59% of adjusted EBITDA. The decline in free cash flow is the result of both higher cash taxes and capital expenditures made during the quarter compared to the prior year. Net income attributable to common stockholders was $9.4 million compared to $12.1 million recorded in the prior year period. Diluted earnings per share for the third quarter were $0.11 compared to $0.14 per share in the same period last year. Excluding a non-cash charge of approximately $734,000 relating to a change in fair value of contingent consideration, earnings for the third quarter were $0.12 per share. If we also adjust for the impact of foreign currency, diluted earnings per share on a constant currency basis were $0.14 for the quarter. Cash paid for income taxes was $4 million for the third quarter compared to $500,000 in the same quarter of last year. Net interest expense was $1.9 million for the quarter, up 23% from $1.5 million in the same quarter of last year. Cash capital expenditures for Q3 totaled $4.7 million. We estimate our total CapEx will be approximately $10 million for the full year 2022. Turning to our balance sheet, cash and marketable securities as of September 30, 2022 totaled $164.8 million. Total debt was $210 million. Net of $75 million of cash and marketable securities on the books, our total leverage as defined in our credit agreement was 1.4 times as of the end of the third quarter. Net of total cash and marketable securities, our total net leverage was 0.5 times. Turning to our pacings for the fourth quarter of 2022. As of today, revenue from our digital segment is pacing plus 13% over the prior year. Our TV segment is pacing plus 11% over the prior year period, with core TV advertising, excluding political books thus far in the quarter, pacing at a minus 4%. As Walter noted, we expected our TV revenue to decline in 2022 from the discontinuation of three of our Univision affiliates in late 2021. That said, we more than make up for any TV revenue decline with our digital segment performance. Excluding the impact of our three discontinued Univision affiliates, TV is pacing at a plus 48%. Lastly, our audio segment is pacing plus 14% over the prior year period, with core audio, excluding political, pacing at a minus 5%. All in, our total revenue compared to last year is pacing at a plus 13%. With this, I will turn it back over to you, Walter.
spk01: Thanks, Chris. Let me speak to a few other points before we open the call to your questions. First, the upcoming midterm elections. We are certainly excited for next week's elections. which should lead to record political ad spend for Entrevision. As I noted on last quarter's call, we are seeing an increasing number of political advertisers reserving television spots well ahead of Election Day, with both political parties this time around locking up inventory early in the election cycle. This purchasing behavior is not something we experienced in the past, and it bodes well for continued momentum through Election Day and into future elections. We will provide our full year political ad spend numbers on our fourth quarter call once we have the final election day numbers, but currently we anticipate approximately $30 million in political advertising revenue this year, which will represent a company record for any election cycle, including presidential. Beyond political growth, the other key areas of our business that we remain enthused about is our global expansion. Given our solid balance sheet, strong cash flow generation, and a team of some of the best professionals in our industry, and despite the current macro conditions, you can expect us to continue to look for opportunities to invest in or acquire companies that will further enhance the digital offerings we provide to our growing global customer base. In addition to growing our global digital business through acquisitions or strategic investments, we also anticipate continued organic growth as evident from our pacings for the fourth quarter. META has been actively evaluating our Latin American team to support them in other international markets. And in each market, we continue to demonstrate strong results, efficiency, transparency, and compliance. As a result, in July, we officially expanded our partnership with Meta in Honduras and El Salvador after testing our services in both regions. We were particularly excited to hear on Meta's recent earnings call that engagement across their applications is the highest it's ever been. With the ability to work with Meta globally, we can leverage this record engagement. As we complete 2022 and head into 2023, we will focus our digital segment efforts on continuing to improve our services with a client-centric mindset at the forefront. Our clients and the digital industry as a whole expect that we offer robust branding, strong conversion rates, transparency, and aftermarket support on each of our advertising campaigns. We believe we have the tools, reach, technology, and best team to deliver on these expectations. This concludes our prepared remarks. I want to extend my gratitude to our InterVision teams around the world for your continued dedication to our company's success, and I want to thank all of our shareholders for your support. Chris and I would like to open up the call to your questions. Operator?
spk07: We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, Please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Michael Krupinski with Noble Capital Markets. Please go ahead.
spk04: I appreciate it. That $30 million number is an extraordinary number, and I was just wondering if you can break that down between radio and television. Are the margins different for each of those? Are the margins on political for TV about the same as radio? I'm curious about that.
spk01: So the margins are about the same for TV and radio as it relates to – What percentage of television of that 30, what percentage of that total is television and what percentage is radio? Chris, do you have that number?
spk03: Well, I don't have the exact number here. 24 million is TV.
spk01: The balance is radio. So it's about what, the 80-20? Yeah. 80% television, 20% radio or audio.
spk04: So you outperformed on both radio and television, though, because... your radio was what, four and a half million typically in that range. So it sounds like you outperformed both of them. I just have a pretty over 64,000 foot question. You know, TV and radio has traditionally been viewed as more of a mature business. And that was what led you to go into your digital, you know, businesses, which are a little faster growing. Does the influx of the Spanish speaking immigrants that are coming through kind of change that narrative a little bit. I know that historically you've been really focused more so on Mexican immigration. You identified more with that population and your TVs or TV stations or radio stations tend to be in those types of markets, border towns and so forth. But now does that kind of change? I'm just wondering what you anticipate, which looks like, you know, with this massive migration. We might see kind of more of a generational type of prospect here with pretty extraordinary growth yet for your Spanish language television and radio stations. I was just wondering if you can give us your thoughts about how you would participate in what we're seeing in terms of the immigration issues.
spk01: So you're suggesting, Michael, that because what we read in the newspapers is and other reporting media, that due to the fact that it appears that a great many of the current migrants that are crossing into the United States are undocumented people, that they are from Central America and South America, particularly Venezuela. And that there's fewer Mexican immigrants coming into the.
spk04: Well, I didn't say that, but I'm curious about what your thoughts are about that because I obviously am not close to that situation as you might be.
spk01: Well, the only thing I'll say is that. Our programming, our Spanish language television programming, is something that we through Univision and Televisa have been doing for more than 50 years in the United States. The approach we use is to create programming that is universal in terms of the Spanish-speaking world. One of the facts is that when undocumented workers arrive in the United States, they don't have a lot of choices as it relates to Spanish language media. It's basically us and Telemundo. And so they decide to watch us, which is fine. It's great. But I don't believe that because of the pattern of migration at this time, and as it's reported, that's affecting our ratings or our business. I think as long as, and I'll say it this way, and I believe that the, two things. One, that the Hispanic-speaking population in the United States will continue to grow through organic and through migration. And I believe that, you know, we will continue to produce programming, which is relevant to that audience.
spk04: Gotcha. And in terms of your digital businesses, I was just wondering in terms of just the growth rates are pretty extraordinary. And there's, it seems like such a great market opportunity. Are you seeing anything of, of anything of slowing or anything that might be indicating that there might be the prospect of, you know, more of a global, economic weakness, anything that we should just kind of be mindful of and take a look at just to have on the radar screen?
spk03: Well, we did plus 17 in Q3. This is plus 13 for Q4. So there is some deceleration. But generally speaking, the business as a whole is still very healthy. Yeah.
spk04: And is that coming from a little bit of a deceleration? It's slight, but Is that coming mostly from, like, Latin America, from Facebook, or is that, you know, just, you know, I guess I'm just trying to understand if that's mostly what we're seeing in Latin America.
spk03: No, there aren't any particular pockets of weakness that are more so than others. It's just generally a global phenomenon.
spk04: Gotcha. Okay.
spk03: That's all I have. Thank you.
spk04: Thanks, Michael.
spk01: Thank you, Michael.
spk07: The next question comes from James Dix with Industry Capital Research. Please go ahead.
spk05: Hey, good afternoon, guys. I guess just given the massive political that you're getting this year, should we be thinking about the incrementality of that to your core business a little bit more differently? I know in the past, you know, there have been attempts made by me and others to try to estimate how incremental political can be. Um, when you have displacement of the core advertisers by it, and I imagine, you know, just traffic management was a pretty big issue in the 4th quarter among others. But any, any thoughts you would you would share on just how incremental you're assuming political is when you. When you talk about the core business.
spk01: In terms of the core business, incremental.
spk03: Well, the incremental, so historically, since we don't do a lot of political relative to the English language folks, we haven't really spoken to an incremental aspect of political. But you turn on our TV stations today, for the next week, you're not going to see many non-political ads. So certainly this year, at $30 million, the incremental issue is here. I'd say, James, all in for the quarter, probably 50% incremental. As far as displacement is concerned, there are a lot of core advertisers who sit on the sidelines while the political season washes through. There's a lot of pent-up demand after the election for particularly the services industry, the legal firms. They're anxious to get back in the game, but they're not going to wade in waters where everything is just jammed as far as the inventory is concerned. Right. Sorry.
spk01: I was just going to say, James, I've been doing this a long time in terms of serving the Latino market here in the U.S. with information dues and entertainment. We've never seen in this political cycle ever happen before where you've got political advertisers seeking our inventory one advance of placing the schedule, paying top rates, And the other thing that's interesting is that this is probably the first time we've seen the Republican Party step into the business of attracting Latino voters to their party. And they're doing it in certainly in a meaningful way. They've been very active in South Texas and Laredo McAllen. They're very active in Nevada. and also Arizona, but that's a first. That's never happened. So what this tells me is this is just the beginning in terms of the exploding demand for Latino voters and the willingness of both parties to go out and actively recruit and solicit these voters. So I think it's great, fantastic that this is happening now and that it's only going to get bigger. because you see what's happening just in general in terms of the media spend by political advertisers. It's never been so big, and so they're looking for every voter they can attract, and certainly the Latino voter is an excellent voter and an excellent demographic, and so we'll see more and more spend as it relates to bringing Latino voters to either the Democratic Party or the Republican Party.
spk05: Great. Just one follow-up on political. Chris, do you have any numbers pro forma for the change in Univision affiliations for either last year for the total political number or 2022? Just anything to try to have a little bit more perspective. It could be even for the full year. Just something, you know, taking those affiliations out, what would the total political have been like last year?
spk03: Versus what you reported yet generally speaking, Orlando and Tampa represented about a quarter of our political and annually. So you can factor that out of our prior numbers accordingly. Wow.
spk05: Okay. All right. Great. And then just in terms of the. The digital representation business. Do you have a rough share of how much of that business is under what you have, what you call kind of exclusive partnership agreements? It seems like a lot of the ones you have with Meta, for example, like the most recent one you announced were structured as kind of exclusive geographically. I'm just curious as to kind of looking beyond that, you know, whether it's Meta or anybody else, because my understanding is TikTok, by contrast, doesn't typically use kind of that same exclusivity. But do you have any sense, roughly, as to how much of your digital representation business is under these types of exclusive partnerships?
spk03: Well, all of LATAM is exclusive with Meta. Asia is not exclusive, and Africa is quasi-exclusive, I'll put it, depending on the region. I'd say all in this past quarter, about 120 million of our digital business in the third quarter was attributable to exclusive deals.
spk01: Okay. Ghana, which we are in the process of launching and we announced, that's a digital marketing partnership with Meta, and that'll be exclusively Meta.
spk05: Okay, great. Do you have any sense as to why Meta tends to prefer the exclusive approach in their business perhaps more than TikTok?
spk03: Well, there's a training process involved, and there's a huge investment on Facebook's side in getting us trained to be able to go out to market. TikTok doesn't have necessarily that same level of training and expertise necessary, and I think that's a big driver of it.
spk05: Okay, great. And then just one, maybe more housekeeping thing. How should we be thinking about cash taxes now going forward? I think you've indicated in the past that much of your NOL shield is gone. And you noted for this free cash flow this quarter, the impact... how should we be thinking about cash taxes kind of on a quarterly or annual modeling basis?
spk03: Yeah, I think what you should do, James, is just model in 24% to 25% tax rate going out the door as far as cash taxes are concerned. Obviously, the NOLs are no longer with us, and we are now becoming a cash taxpayer.
spk05: Okay. My last one is just on the digital profitability aspect. I think in my model, at least going into the quarter, I was not assuming a lot of margin expansion, operating cash flow margin expansion this year, even though your growth is well north of 20%. I mean, is that being too conservative? Are there any kind of one-time costs which are maybe weighing on the business this year that might cycle through next year or something in terms of margin expansion?
spk03: There are some incremental costs that we are undertaking just to integrate these businesses that may be one-off in nature. As far as putting a number on that, probably safe to call it maybe a $1 to $1.5 million of incremental expense that is kind of one-time in nature, but otherwise, no.
spk05: Okay, I lied. I had one last follow-up. Do you have a balance for your contingent consideration, both long and short-term kind of lumped together? I think it was around $77 million, if I recall, at the end of the second quarter. I know it's in your queue, but I just figured while you were on.
spk03: Yeah, it's in the queue. It's about $56 million as it stands today.
spk05: Okay, great.
spk03: Thanks so much.
spk01: Thank you. Thanks, James.
spk07: The next question comes from Edward Riley with EF Hutton. Please go ahead.
spk06: Hey, guys. Thanks for taking my question. Just to piggyback on Mike's question, within digital, is the 13% pacing growth, is that inclusive of 365, which was purchased in November? Is that a pro forma, kind of organic figure?
spk03: No, that's the print on a pro forma basis. You know, 365 is not big enough to move the needle. Small. Yeah, it's small. So that's almost a pure number as far as pro forma, that 13%. Okay. Okay, gotcha. Q3.
spk04: Right, right, right. Q4 is pacing at plus 13.
spk01: Right.
spk04: Okay, got it.
spk01: For digital. Right. Sorry, we lost you. Go ahead.
spk06: No, it's okay. Congrats on the Meta Ghana partnership. When do you expect this to really start ramping up?
spk01: It's ramping up now. We've got executives going over to Africa this week and will be part of the launch there in Africa. And so it's moving fast as we continue to devote more resources and in time to the success of this launch.
spk06: Gotcha. And should we be expecting any more cross-platform partnerships going forward, maybe looking into fiscal year 2023?
spk03: You mean partnership expansions into new territories with existing relationships? Yes. Yeah, the short answer to that is yes.
spk01: We're working on several. Something we're working on all the time. Great. We continue to build tools, too, that will make our partnership with these global digital marketing companies more successful.
spk06: Gotcha. And then last one for me, just wondering if you could kind of expand on the plan for the marketable securities portfolio. What's it really consist of? and if you could give us any strategic direction with what you guys are planning on doing with that.
spk03: Those are short-term investments in corporate-grade bonds. Nothing very risky, and it's constantly being rotated. And it's just putting our cash to work. That's all it is. There's nothing strategic about it other than to try to make a buck or two on our existing cash balance.
spk07: Okay, great. Thanks.
spk01: Thank you. Thank you.
spk07: The next question comes from Robert Maltby with Singular Research. Please go ahead.
spk02: Hello, Walter. Hello, Chris. Good to catch up. Firstly, my predecessors did a very efficient job, and I've marked off a lot of questions I was going to ask, so I just have a couple here. Regarding, first, congrats on that top-line digital revenue number in a very tough environment. That's impressive.
spk07: Thank you.
spk02: On the acquisition landscape, just generally speaking, with the revaluations that have been going on, are you finding it more compelling? Are you seeing more potential targets, or what's your thinking there?
spk01: Well, I think that entrepreneurs are maybe becoming more realistic about the valuation in light of what's happened in the market, both the private and public markets. So, we'll continue to see if that holds, but we're looking for opportunities that are complementary to our existing business, strategic, and, of course, that fit the economic model that we built to support the rationale for acquiring the business.
spk02: Perfect. And finally, on your net interest expenses, are you... What's your thinking in terms of this new inverted yield curve we're dealing with? And how are you facing or planning on adjusting perhaps to this headwinds with higher interest rates?
spk03: Well, we're in a floating interest rate instrument with our debt. We don't have any plans right now to rethink that. We're going to be refinancing our debt sometime in the near term. At that point, we'll look into perhaps some kind of a hedge or locking in interest rates, but it's still too early to think through all of that.
spk02: All right.
spk07: Thank you.
spk02: Thank you, Robert.
spk07: This concludes our question and answer session. I would like to turn the conference back over to IntraVision CEO, Walter Ulloa, for any closing remarks.
spk01: Thank you again everyone for joining us today on our third quarter earnings call. We look forward to sharing our progress with you on our fourth quarter earnings call in March of 2023. Thank you.
spk07: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Disclaimer

This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.

-

-