Transcript
Good afternoon. My name is Josh, and I will be your conference operator today. At this time, I would like to welcome everyone to the Coupang Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. Thank you. Now I would like to turn the call over to Mr. Michael Senno, Vice President of Investor Relations. Please go ahead.
Thanks, operator. Welcome to Coupang, Inc.'s quarterly earnings conference call for the third quarter ended September 30, 2021. I'm pleased to be joined on the call today by our Founder and CEO, Bom Kim; and our CFO, Gaurav Anand. The following discussion, including responses to your questions, reflects management's views as of today's date only. We do not undertake any obligation to update or revise this information except as required by law. Certain statements made on today's call are forward-looking statements. You should not place undue reliance on forward-looking statements. Actual results may differ materially from these forward-looking statements. Please refer to today's earnings release, as well as the risks and uncertainties described in our most recent quarterly report on Form 10-Q filed with the SEC on August 16, 2021, and then other filings made with the SEC for information about factors which could cause our actual results to differ materially from these forward-looking statements. During today's call, we will present both GAAP and non-GAAP financial measures. Additional disclosures regarding these non-GAAP measures, including reconciliations of non-GAAP measures to the most comparable GAAP measures, are included in our earnings release and our SEC filings, each of which is posted on the Company's Investor Relations website at ir.aboutcoupon.com. And I'll remind you that these numbers are unaudited and may be subject to change. Let me now turn the call over to Bom.
Thanks, Michael, and thank you to everyone for joining us today. We continue to extend our lead in the fast-growing Korean e-commerce segment, posting total revenue growth of 48% in the third quarter. That builds on last year's massive growth for a two-year compounded annual growth rate of 70%. That growth is underpinned by our expanding customer base and compounding customer cohort behavior. Even against elevated COVID conditions, we posted our 15th straight quarter of at least 20% year-over-year growth in active customers, and spend grew at least 25% year-over-year for every annual customer cohort, including our oldest cohort from 2010. Our strategy to build compounding customer loyalty and long-term shareholder value is reflected in our core operating principles. One, we exist to deliver new moments of WOW for customers and create a world where they ask, 'How did we ever live without Coupang?' Two, we don't start with what looks easy. We embrace the hard work of challenging trade-offs that customers take for granted. Three, we will employ technology, process innovation, and economies of scale to create an amazing customer experience and drive operating leverage and significant cash flows over time. Four, we prioritize growth in long-term cash flows. Five, we are disciplined capital allocators. We start with small investments, then increase investments over time in the opportunities that have the best long-term potential. The opportunity in the Korean market remains as attractive as ever. The total retail market in Korea, excluding autos, was up 10% year-over-year in Q3 and boasts a two-year CAGR of 5%. Bolstered by that broader retail market tailwind, the total e-commerce segment grew 20% year-over-year in Q3. And e-commerce, excluding travel, has now grown at least 20% for 12 straight quarters. The Korean e-commerce segment is on track to reach annual sales of approximately $200 billion by 2024, and is projected to become the third largest in the world after only the U.S. and China. Even at our scale as the leader in Korean e-commerce, we continue to grow at a multiple of the e-commerce segment. Our growth is broad-based with all of our offerings growing at least twice as fast as the respective segments. The backbone of our sustained growth is our strong customer retention and engagement. Members who spend and purchase frequently are significantly higher and continue to grow faster than active customers. The number of active customers buying across six or more categories has more than doubled from just two years ago, further evidence of our strengthening wide flywheel. The result is that the spending for newer cohorts is starting higher and compounding faster. What's more, the 25% or higher growth across every one of our annual customer cohorts did not reflect the full customer demand that we saw in Q3. Korea imposed Level 4 COVID restrictions starting in July, stricter than at any point in the pandemic, contributing to a decline in attendance and hiring at our facilities. The shortage was exacerbated by the loss of one of our largest fulfillment centers to a fire in June, and continued operations center closures due to COVID cases. We sacrificed some growth by taking measures such as not accepting orders beyond daily capacity to preserve our delivery promise to customers. In doing so, we maintained average Rocket delivery times under 12 hours and delivered nearly 99% of orders in one day. We're investing to expand capacity to keep up with high demand and extend our competitive moat. We increased our fulfillment and logistics infrastructure footprint by over 8 million square feet year-to-date through Q3, and we will add millions more over the next year. For context, we've now added as much square footage of infrastructure since the beginning of 2020, as we did in every year prior to 2020 combined. This includes a significant expansion for our fresh offering, which has been particularly capacity constrained since COVID started and accelerated adoption. We're on track to double our fresh performance footprint in 2021. We believe we now have more than doubled the total infrastructure footprint of our largest online-first competitors combined. We're cautiously optimistic that attendance and hiring will rebound much as they did after the government relaxed the previous round of restrictions in early 2021. In addition, our operational teams are focused on enhancing recruiting processes and making technology improvements that we believe will also help scale our workforce with greater efficiency in the future. Amid these strong demand tailwinds, our underlying profit drivers are also improving with scale. Retail product level profit before operational costs has increased in each of the past six quarters. Our highest profit categories are also growing the fastest. We're still far off from entitlement on both margin and mix and we see a long runway for continued improvement. Our monetization efforts are also gaining traction. Advertising revenue nearly tripled year-on-year in Q3. We're still in the early innings and expect advertising to contribute significantly to margins in the future. Other merchant services are also showing promise. Merchants beta testing our fulfillment and logistics offering are seeing a significant sales uplift. We expect fulfillment and logistics by Coupang to become another meaningful contributor to profits over time. These improving profit drivers were obscured by short-term disruptions and the timing of investments. First, we invested approximately $95 million in incremental labor and operational costs following the increase in COVID-19 cases and heightened restrictions in Korea in Q3. Second, a higher percentage of capacity was underutilized due to the timing of infrastructure investments. For example, as part of our aggressive expansion efforts in Fresh, nearly half of our fulfillment centers in Fresh recently opened or are still under construction. These centers generate little to no revenue today but account for a sizable portion of our Fresh investments. We believe this capacity will enable us to capitalize on the massive demand for our offerings, drive strong future growth and improve profitability as we scale. Third, we're also investing in WOW membership benefits, expanding our free shipping services, and delivering more orders by same-day or dawn delivery. The rapidly growing share of orders by WOW members creates higher costs in the short-term, but over time, as this share stabilizes, we expect cost per order to improve as operating leverage against fixed costs will only continue to grow with scale. Meanwhile, the higher loyalty and engagement from these differentiated experiences will further broaden our customer funnel and accelerate our flywheel. We've also seen some productivity decline as we add record levels of capacity and reduce delivery times for an increasing number of orders in the current environment. We have seen similar dips in past periods of heavy investments. As was the case with previous investment cycles, we expect to ramp up our new facilities, drive process improvements, and leverage increasing order density and other economies of scale to improve unit costs over time. Additionally, we have significant opportunities to amplify efficiency gains with continued investment in technology and automation. Our size and scale put us in a unique position to make such investments. And in doing so, further differentiate our offerings for customers while building on our structural cost advantage. We're also excited to continue investing in our most promising new offerings. Demand for Fresh has outpaced capacity for much of the past year. As I noted, we are aggressively expanding to capitalize on that opportunity and expect significant operating leverage as we grow into the new capacity. Fresh is following a similar trajectory as Rocket, which gained leverage on investments as it scaled, and turned profitable in time. It's been our fastest scaling major offering marked by strong customer adoption and retention. The monthly order frequency for our early cohorts where we first launched, is now approaching the same level as WOW member frequency. We're increasingly confident in the long-term profitability that gives us conviction to continue to invest in the near-term to scale Eats. In closing, we're encouraged by the underlying trends of the business and confident that continuing to execute on our operational principles will lead to significant shareholder value creation in the long-term. Now I will turn the call over to Gaurav to go through the financials.
Thanks, Bom. Our reported revenue growth of 48% and constant currency growth of 44% are driven by strength across all our product offerings. Net revenue exceeded $500 million for the first time in Q3, increasing 113% year-over-year, led by our Eats and logistics offerings. The flywheel we ignited with our first-party offering continues to strengthen and it is fueling strong growth in third-party and our new product offerings, and we expect that momentum to only accelerate. Quarterly, active customers increased 20% in Q3 to 16.8 million. Year-over-year growth on a turning customer has been fading and remained consistent throughout 2020 until the first half of 2021. Customer engagement is rising with customers buying across more categories, and our new offerings. Revenue per customer grew 23% in Q3, driven by our compounding spend across all our customer cohorts. Even our oldest consistent cohort grew over 25%. Further evidence that we still have significant potential to capture more market share. We were less aggressive on customer acquisition this quarter to enhance the experience for existing customers. Prioritizing what's best for customers drives loyalty and engagement, and we believe that is the best long-term approach. We are still very early in our growth potential with the opportunity to more than double our active customer count over time as we systematically penetrate the 27 million active internet shoppers in Korea. As Bom noted, we invested nearly $95 million in incremental labor and operations to service as much customer demand as possible amid COVID-related headwinds. This included increased operations costs to keep our employees safe and healthy, along with higher worker incentives and recruiting costs to navigate delivery constraints. When COVID cases spiked and restrictions increased in Q3 last year, it led to a similar increase in COVID-related costs. We expect these labor and operating investments to remain elevated at least in Q4, but we believe they are temporary and will diminish when COVID conditions normalize. Moving down the P&L, gross profit increased 62% year-over-year to $755 million in Q3 with gross margin expanding 130 basis points to 16.3%. Prior to COVID, our gross margin was approaching 20%, and fundamental drivers remain strong despite the COVID-related costs. The increased adjusted EBITDA losses in Q3 compared to Q2, primarily stem from the incremental COVID-related labor and operational costs. Excluding such costs from all periods, the Q3 adjusted EBITDA margin was similar to the margin in the first half of the year. Investments to scale Fresh and Eats and to develop new long-term growth initiatives continue to drive the balance of adjusted EBITDA loss, offset in part by increasing profits from our mature offerings. Operating cash flow was negative $191 million in the third quarter due to higher losses and a modest working capital decline. The working capital reflects less management from accounts payable. Our cash conversion cycle is unchanged, and we expect favorable working capital dynamics in our business and improving profitability to drive stronger cash flows over time. With nearly $4 billion of cash on our balance sheet, we are well positioned to invest aggressively to extend our lead in Korean e-commerce and capitalize on significant demand for our product offerings. We're excited to build on our momentum and continue driving strong growth for many years to come. Operator, we're now ready to begin the Q&A.
Your first question comes from Eric Cha with Goldman Sachs. Please go ahead.
Yes, thank you for the opportunity. In the presentation, it was mentioned there were $95 million in additional labor and operational costs, primarily due to COVID-19 issues. This likely pertains to the capacity challenges noted during the last quarter's earnings call and may have impacted the Company's top line, given its focus on consumer experience. The key question now is whether you're seeing improvements in the fourth quarter, and if not, when do you anticipate a resolution to both the costs and the top line growth reaching its full potential? My next question concerns active customers. The year-over-year growth appears strong, but if I'm correct, this would be the first sequential decline in active customers for the Company. Can you provide some insight on this? Thank you.
Hi, Eric. Thanks for the question. You're right. There was a strong effect on the top line as well that not only affected our revenue growth but also affected our active customer growth. First, on the active customer point, as you pointed out, it was still strong growth year-over-year, 20% year-over-year growth, it did not reflect just as our revenues now reflect our full demand. We sacrificed to preserve customer experience several percentage points of revenue growth. Per our estimates, we sacrificed at least 5 percentage points. And it was done through measures such as not taking orders when we reach our daily capacity. It's a difficult decision in the short run, but for us it was an easy decision under our operating principles. We've made difficult choices like this in the past, like preserving long-term customer trust, which is one of the reasons you see our customer cohorts compounding at the rate that they are. Even in spite of that constraint, we still saw not only strong growth in active customers, but we're growing at a multiple of the e-commerce overall growth rate. Q3 recorded the highest share, more cents per dollar of incremental growth than in any quarter in our Company's history. As for how long this will persist, it's difficult to say. We've been through these cycles before, as you know, Eric. Last 2020, when restriction levels were heightened in Q3, we saw a similar impact on our labor, on our hiring, and our attendance. As restrictions were loosened and social unease and concerns declined, cases declined. We saw a return to normalcy and I think that's a very different phenomenon. That's the difference with Korea, for example, and the U.S. is that we've been through a cycle where we've seen glimpses of normalcy. In the early part of the year when things returned to attempts of normalcy, we saw those constraints on labor, particularly hiring and attendance dissipate. As the restrictions have been loosened as of November 1st, but cases still remain high. In the near term, I think the situation still remains very fluid. But we are cautiously optimistic in the long run that we are going to see the kind of return to normalcy that we saw a glimpse of earlier in the year. But we're also not resting and assuming that that will take care of all the issues. Even though in the near term we face that uncertainty, we continue to make investments in process improvements and recruiting, for example, that we think will help us scale more efficiently. There have also been efforts and projects on automation and process improvements that are a source of capacity increase. Some of those projects have been delayed because we have been trying to keep up with record demand over the last couple of years. So, we'll continue to make investments in automation and process improvements that we believe will help us scale our business going forward. Certainly, again, that takes time. It will take several quarters, but over the long term, we are optimistic - cautiously optimistic that the current constraints will be transitory.
Your next question comes from the line of Susie Lee with Bank of America. Your line is open.
Hello. Thank you very much for the opportunity. I have two questions. First, on profitability. Well, I recall that during the second quarter earnings call last time, you mentioned that the EBITDA from traditional e-commerce business, so excluding Coupang Fresh and Coupang Eats, was almost break-even. I was wondering if this trend continues. Hopefully in the third quarter, the traditional e-commerce business was able to turn to profit on an EBITDA line? So that is my first question. And then the second question is about Coupang Eats. I think investors are quite interested in your initiative in Coupang Eats further market share gains. So, is there any indicator that the management could share with us to help us better understand your presence in this market? Like could it be traffic or number of orders or probably the best indicator would be a market share in terms of GMV or the total gross order value? So anything you can share will be super helpful. And thank you.
Thank you for the questions. I will address the second question about Coupang Eats first. The service is experiencing significant momentum and is currently our fastest-growing service in the history of the Company. In our earnings release, we highlighted the impressive customer adoption rates, noting that the Eats App was the most downloaded app in Korea on iOS and the second most downloaded on Android for 2021 so far. The only app that has surpassed the Coupang Eats App in downloads on Android is the government app for COVID vaccinations. What’s even more encouraging than the adoption rates is the customer retention we are observing, which we believe reflects the value we are providing. While we still have a long way to go, we are focused on delivering the best experience at the lowest cost. We are seeing positive trends in retention levels and increasing frequency among our customer cohorts. In fact, in the areas where we launched our earliest cohorts, we are approaching frequencies comparable to those of WOW members, which is fantastic. We are excited about this progress, but we acknowledge it is still early, and we are committed to enhancing our customer experience and our value proposition in terms of selection, service, and cost structure, benefiting both customers and merchants. Regarding profitability, the key drivers are improving. As you mentioned, there are some short-term factors that could obscure the improvements in our underlying profit drivers. After disruptions from COVID and related investment timings, our overall store performance remains steady. Excluding the impact of COVID and the $95 million mentioned, we continue to focus our investments on Fresh and Eats. We are also investing in our mature business areas while reinvesting in Fresh and Eats. We are exploring small initiatives in new areas like international FinTech. Overall, the dynamics are moving in a positive direction. We are building record levels of capacity, leading to a higher rate of underutilization. For example, nearly half of our Fresh facilities are under construction or recently opened and are not yet generating revenue. These developments will strengthen our position long-term, enhance customer experiences, and expand our value proposition, although they may create some short-term noise that could obscure our improvements.
Your next question comes from the line of Stanley Yang with JPMorgan. Please go ahead.
Well, thank you. I have two questions. The first question is about this ongoing margin pressure. You attribute it to margin pressure to COVID-19 driven labor and logistic costs. But how about from a competitive landscape perspective? Are competitors trying to catch up the faster delivery logistic capabilities? Is this another reason for structural pressure in the mid-term? Also separately, when do you expect the business to reach breakeven or EBITDA at which scale? The other question is about your logistics capacity. Are you on track with your previous guidance of 50% growth of the fulfillment center capacity over the next year? And when do you think your third-party fulfillment service will start to meaningfully take off? Those are my questions. Thanks.
Stanley, could you please repeat your last question?
Sure.
I didn't hear the 3P.
Sure. Actually, the third-party fulfillment service is now.
I didn't hear the 3P. Could you repeat your last question again?
The market was expecting a significant takeoff. When do you think the right timing will be?
Thank you for the questions. There are several points to address. Regarding competition, we noticed virtually no impact from competitive factors. From our perspective, more than ever in our company's history, we believe our business drivers are unaffected by competition. Our demand wasn't limited; instead, it was our capacity. In fact, during the last quarter, we reduced our efforts to acquire new customers to protect the customer experience. We currently have 37 million new customers who are progressing well, and there have been times when we focused more on customer acquisition and times we stepped back. This past quarter, we chose to step back to prioritize customer experience. There hasn’t been any constraint on demand; rather, we've gained momentum in capturing every additional dollar of market growth. Regarding Eats, we've been pleased with our projects aimed at optimizing efficiency and leveraging the technology and processes we've developed for our core e-commerce. This includes enhancements in labor management, route optimization, and more to drive efficiency. We also see the same structural advantages with increasing orders and economies of scale due to order density. We are enthusiastic about this aspect of Eats and plan to create more synergies between our core e-commerce and Eats in the long run. Just as we have shared economies of scale from e-commerce with Fresh, we believe similar opportunities exist with Eats. However, we are still in the early stages of this process, and our focus is on nurturing the customer experience and attaining critical scale to develop operating leverage. Regarding logistics capacity and growth, Gaurav can provide more insights. We've been adding record capacity, and I believe Gaurav can elaborate further on this. Let me briefly address the performance of our 3P logistics. We have conducted significant testing to build confidence and better understand the needs of merchants and operational scaling. We're emerging from our beta testing this year with strong confidence in this offering. Merchants who participated in our testing have experienced substantial sales growth, particularly among small and medium-sized enterprises. We're optimistic about the clarity of the value proposition for both customers and merchants. Our focus is on developing the right technology and capacity to support scaling this service. This process won’t be instantaneous. We now have a much clearer understanding of the requirements needed to enhance our technology tools to support service scalability. We're advancing our core capacity while also adding logistics capacity through Coupang. In the near term, we'll concentrate on establishing the foundational capabilities for scaling fulfillment logistics through Coupang. You can expect to see it becoming a significant contributor to our business in the latter part of next year. In the long run, we anticipate this offering will meaningfully contribute to both our top and bottom lines.
And to answer your question on capacity buildup, we have built about 8 million square feet of capacity this year-to-date. Since 2020, we have built our capacity as much as we had built in the multiple years prior and we continue to invest aggressively, especially in the context of fulfillment and logistics. We'd actually be building and continuing to invest more. That could be of having capacity constrained also and I much a 1% back have been capacity constrained on that but we would plan to avail for that also next year.
Your next question comes from the line of Seungjoo Ro with CLSA, please go ahead.
Hi, thank you very much for the opportunity. So, I have 2 questions as well. The first one would be whether we could have some update on your overseas expansion plans and share a little bit in terms of how your experiments in markets such as Japan, Southeast Asia are progressing at the moment? And are we near to a point where we will become more aggressive in some of these markets in terms of investments? My second question is related to the growth outlook and apologies if I'm being a bit more short-term-sided but what would be your growth outlook in terms of revenue for the next six months? On top of the constraints that you have mentioned earlier, we are seeing a bit of a deceleration in revenue growth, and partially that's because of the high base. But the Korean offline space is also gradually opening up. COVID policy has now turned more flexible. So, are we going to see more continued deceleration into the year-end, into the first half of next year? And what will be the degree of such deceleration? Thank you.
Thanks for the question. I’ll address the second part first. You've noted the deceleration in growth. As we stated, our growth hasn't fully captured the entire demand. We've taken proactive steps to maintain customer experience, and this principle will remain in effect for future quarters. We will continue to prioritize long-term customer trust, even if it affects short-term growth. Our guiding philosophy is not to maximize growth every quarter. If you consider our business as a whole, it includes various offerings at different stages. We will make decisions that favor long-term customer loyalty and value maximization, as well as free cash flow, over short-term growth. Our offerings are in various lifecycle stages, and any quarterly performance is an aggregate of these different strategies. For certain offerings, we will aggressively pursue growth, while for others, we may focus on testing and building confidence. Additionally, some offerings are more mature and we need to enhance operational efficiency to start generating significant cash flows. Internally, we liken our offerings to children; some are in the toddler phase needing nurturing, while others are in college and require support to become productive. In any given quarter, you'll see a mix of these strategies. However, over time, we will focus on investments where we need to achieve critical scale, as many offerings must reach that point to realize operational efficiencies. We also expect to see benefits from this growth as some service offerings mature, allowing for operational leverage. In the company’s history, including with Rocket, we have prioritized reaching critical scale, followed by focusing on operational excellence to achieve leverage. While I can't predict precise quarter-to-quarter growth, I assure you that this is the overall trend for our business in October, and even while sacrificing short-term growth, we're still growing significantly faster than the e-commerce segment this past quarter. A lot of this growth stems from our compounding cohorts. Our oldest cohort, which is eleven years old, saw a spending increase of over 25% last quarter, despite the constraints we discussed. Each of our cohorts is compounding rapidly due to our investments and strategic long-term decisions that we believe benefit our customers, the business, and shareholders. We will continue to consolidate gains from our scale and strive for operating leverage while progressing towards profitability for our mature services. Regarding international expansion, that is still in an earlier life stage. I've been reviewing those margins and remain optimistic about the prospects. We see potential to create exceptional customer experiences, similar to those we encountered early in our journey in Korea. However, it's still early days, and we're constructing teams and testing approaches. We’ll begin with small investments and scale them up as we gain insights and confidence. This is the disciplined approach we’re applying to all of our investments, including our international efforts.
Next question comes from the line of James Lee with Mizuho. Your line is open.
Great. Thanks for taking my questions. Two questions here. Any update on the impact of your warehouse fire? Did you have to incur additional costs to rent temporary warehousing to the extent that you can maybe quantify those costs? And also secondly, on competition. Can we get an update on that? Are you seeing your peers maybe ramping up capacity investment to catch up to your capability? Thanks.
Thank you for the questions. Regarding the warehouse situation, as you noted, adding capacity on short notice tends to be inefficient. Any unplanned capacity we add at the last minute often results in inefficiencies, which we experienced in our network. With time, we plan to replace this with more permanent solutions, enhanced automation, and improved processes. There were some disruptions, as you mentioned, not just due to last-minute capacity additions but also due to any new capacity we introduced. For instance, we had unplanned Fresh capacity. We aim to reduce negative impacts by managing orders carefully. We're actively working through these challenges and will keep enhancing both the efficiency of our operations in individual warehouses and the overall network efficiencies that arise from such unplanned additions. These improvements are already becoming evident over time. Regarding competition, I want to emphasize that we haven't felt any impact from it. No one has matched our investments. So far this year, we've added 8 million square feet of pro forma infrastructure after accounting for the capacity lost due to the fire. We have a significant capacity advantage, and I don’t believe anyone is close to making investments that match what we're doing. We focus primarily on what we can control to serve our customers and meet the strong demand we anticipate.
And our last question comes from the line of John Yu with Citigroup, please go ahead.
Hi. Thank you for the opportunity to ask questions. My question is also about the capacity constraint in the third quarter. I would like to understand more details, especially if it was more related to labor or more related to physical assets like warehouses. Also, recently, local outlets are highlighting that there is a shortage of gig workers in Seoul and nearby metropolitan cities due to the increased demand from food delivery players and e-commerce warehouses. So, could you elaborate more on how Coupang is managing the labor shortage and the increase of daily rates to hire enough gig workers? Thank you.
Thank you for your question, John. The capacity constraint we've experienced was due to both physical limitations and labor issues. For instance, in our Fresh segment, we faced these challenges and are actively working to increase our physical capacity. To give you an idea, we're on track to double our physical capacity this year in Fresh, and we believe we have now surpassed the combined physical capacity of our closest competitors. However, even with this improvement, it is still not sufficient to meet the full demand. Therefore, we are investing heavily in enhancing our physical capacity. Regarding labor, we've been affected by disruptions related to COVID-19 and have seen some fluctuations in our workforce. We hope to see a rebound, so we are also focusing on strengthening our recruiting efforts as well as making efficiency improvements and increasing automation to further enhance our capacity in the future. In the context of gig workers, particularly in the Korean market, it's important to note that the situation differs from that in the U.S. and Europe, mainly because there isn't a large ride-hailing sector here, which typically accounts for a significant portion of gig workers. Despite this, we are the leading logistics and food delivery service in the market and the largest employer of food deliverers. We believe there are no macro constraints at this time, but we are continuing to invest in expanding our workforce. So far, we have not encountered the macro challenges that are often observed in more developed markets.
There are no further questions at this time. And this does conclude today's conference call. Thank you for your participation. You may now disconnect.