Good day, everyone, and welcome to the Trupanion Fourth Quarter 2023 Earnings Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note that today's event is being recorded. At this time, I'd like to turn the floor over to Laura Bainbridge, SVP of Corporate Communications. Ma'am, please go ahead.

Good afternoon, and welcome to Trupanion's fourth quarter and full year 2023 financial results conference call. Participating on today's call are Darryl Rawlings, Chief Executive Officer; Margi Tooth, President; and Fawwad Khureshi, Chief Financial Officer. For ease of reference, we've included a slide presentation to accompany today's discussion, which is broadcast on today's webcast. A copy of the slides will also be made available on our Investor Relations website under our quarterly earnings tab. As reported in today's earnings release, the audit of our financial statements for fiscal year 2023 is in progress. We have identified two material weaknesses in connection with that audit. As a result, the numbers reported today are preliminary. We continue to work with our auditors to complete the audit, which may affect our ability to timely file our Form 10-K, as we finalize our financial statements and disclosures and allow the company's independent registered public accounting firm to complete its procedures related thereto. I would also like to remind everyone that during today's conference call, we will make certain forward-looking statements regarding the future operations, opportunities and financial performance of Trupanion within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve a high degree of known and unknown risks and uncertainties that could cause actual results to differ materially from those discussed. A detailed discussion of these and other risks and uncertainties are included in our earnings release, which can be found on our Investor Relations website as well as the company's most recent reports on Forms 10-K and 8-K filed with the Securities and Exchange Commission. Today's presentation contains references to non-GAAP financial measures that management uses to evaluate the company's performance, including, without limitation, variable expenses, fixed expenses, adjusted operating income, acquisition costs, internal rate of return, adjusted EBITDA and free cash flow. When we use the term adjusted operating income or margin, it is intended to refer to our non-GAAP operating income or margin before new pet acquisition and development expenses. Unless otherwise noted, margins and expenses will be presented on a non-GAAP basis, which excludes stock-based compensation expense and depreciation expense. These non-GAAP measures are in addition to, and not a substitute for, measures of financial performance prepared in accordance with the U.S. GAAP. Investors are encouraged to review the reconciliations of these non-GAAP financial measures to the most directly comparable GAAP results, which can be found in today's press release or on Trupanion's Investor Relations website under the Quarterly Earnings tab. Lastly, I would like to remind everyone that today's conference call is also available via webcast on Trupanion's Investor Relations website. A replay will also be available on the site. With that, I'll hand it over to Darryl.

Thanks, Laura. Good afternoon. Across our key financial metrics, Trupanion made strong sequential progress in the fourth quarter. We delivered significant margin expansion in our subscription business. Since Q1, our adjusted operating margin has expanded approximately 540 basis points. Quarterly capital allocation was highly efficient, and we generated another quarter of positive free cash flow. I'm pleased with this improving trend in our results, but they don't tell the whole story. Entering the year, we faced unprecedented levels of veterinary inflation. We experienced margin compression in our subscription business, the first period of sustained compression since going public in 2014. We also made the necessary decision to transition to a more decentralized operating structure, which will better set us up to grow and be nimble in the years ahead. The team navigated well during this period of adversity. We took meaningful and deliberate actions to reduce expenses. We're operating with increased efficiency and discipline across the organization. I've also been impressed by the innovation and evolution of our tools the team is leveraging to drive our performance. I expect that we will carry our learnings forward with increasing levels of discipline and rigor. On that note, I also want to acknowledge the two material weaknesses reported today. We're committed to remediating and to doing better in the future. In 2024, we will look to grow our adjusted operating income by greater than 30%. As our margins expand, the team will be more aggressive in growing, deploying the majority of these pre-tax funds at our high rates of return in our large underpenetrated global markets in which only 3% of pets have pet medical insurance. We intend to do so while remaining free cash flow positive on an annual basis. Delivering on this plan will translate into strong value creation for our shareholders. We've done so for shareholders every year, except this past one. While I'm disappointed with the year-over-year results of our adjusted operating income per share in 2023, I'm proud of the team. The inherent challenges of the post-COVID veterinary inflation environment have made us a stronger and more capable team, setting us up well headed into 2024 and beyond. With that, I'll hand it over to Margi.

Thanks, Darryl. Good afternoon, everyone. I'm pleased to share that our results in the fourth quarter showed continued momentum across multiple areas of the business. Our performance speaks to our ongoing focus on disciplined growth, margin expansion, and operating with increased efficiency across the business. In the quarter, total revenue grew 20% to $296 million. Subscription revenue increased 21% year-over-year, benefiting from a 14% pet growth and a 6% increase in average revenue per pet. Growth in ARPU for our core Trupanion product, which makes up 98% of our subscription business, was even higher, increasing 7.5% year-over-year, as our approved rate flow continues to show more meaningfully. Retention for this book of business was 70 months on a trailing 12-month basis, in line with our expectations. While we continue to closely monitor our retention rates across our three key retention cohorts of first-year under 20% rate increase and over 20% rate increase, we are paying particular attention to this latter bucket as a larger than normal portion of our members are seeing a pricing adjustment in excess of 20%. Over the last 12 months, approximately 298,000 members have had this experience, and through year-end, we had retained over 98.28% of them on a monthly basis. We now have an average of 26% pricing rolling through our book. And while still early in the year, inflation remains in line with our expectations at 15%. Against this backdrop, we are continuing to invest in our member retention efforts, both operationally and through direct member outreach, increasing member education around our value proposition and the increased need for Trupanion as the cost of care rises. We have also identified opportunities to improve execution around our member experience. This relates predominantly to the use of our new policy administration system, which we expect will take some time for team members to learn. Meanwhile, while we ramp up the system, we're seeing lower than expected service levels. With our migration nearing completion, we look forward to leveraging our latest technology platform to deliver an exceptional member experience, and ultimately enhance our claims automation rates, a key differentiator as a low-cost operator. Ultimately, the investments we have made are intended to help scale our business globally with greater levels of control and oversight, both from a member perspective as well as operationally. Adjusted operating margin for our subscription business was 13% in the quarter. While not yet at our target, I am pleased with the strong quarter-over-quarter expansion. This is a reflection of deliberate and meaningful actions taken to enhance our value proposition, drive efficiencies, and reduce any and all costs a member would not thank us for. This will be an ongoing focus in 2024. In total, we generated over $27 million in adjusted operating income, which marks a new quarterly record. Of this, we deployed approximately $15.5 million to acquire nearly 67,000 pets. This represents the same level of pet additions year-over-year, but with 23% less spend. As margins continue to expand year-over-year, we expect to grow our allowable per pet acquisition costs in line with our guardrails. While we're pleased to deliver growth efficiently, it is not our plan to throttle down growth so significantly over the long term. Once again, our veterinary channel drove the majority of our growth for our core Trupanion product. Since early 2022, we have experienced an unprecedented inflationary environment, during which time the need for Trupanion has never been greater. As a direct result of this, we continue to see strong leads, conversion, and retention rates from our heartland, the veterinary channel. In the quarter, we spent just over $13.7 million to add approximately 54,200 new pets at an average new pet ARPU of $67.61. We estimate the average lifetime value of these pets at $615, and at an average cost to acquire of $233, the estimated internal rate of return of these pets was 42%, above our guardrails of 30% to 40%. We also continue to see steady growth from our new products, channels, and geographies, which collectively represented approximately 19% of our gross pet adds in the quarter. Within our newer North American products, which include Furkin and PHI Direct, powered by offerings for Chewy and Aflac, we added approximately 9,000 new pets at a new pet ARPU of $38.06. As noted, overall, these products have lower coverage, which ultimately leads to lower retention and therefore, lower lifetime value. Given the early stages of development, investment in growth of these products continues to be minimal. In the quarter, we spent just $1.1 million to acquire these pets, which is just 7% of our total acquisition spend and equating to an average pet acquisition cost of $119. Because these products are not yet operating at scale, the estimated lifetime value and internal rate of return of these pets was negative. Achieving a 15% adjusted operating margin for these new offerings will be a primary focus for us before we look to increase our level of acquisition investment here. Moving away from our North American coverage, in Europe, we invested just $800,000 to add approximately 3,400 new pets in the quarter. Keep in mind that today, these products are not yet fully underwritten by Trupanion, and thus the revenue is not yet fully realized. International expansion is a key part of our 60-month plan, and over the last three years, we've more than doubled our addressable market to over 50,000 veterinary hospitals. Our margin expansion, coupled with lower acquisition spend helped generate over $30 million in free cash flow in the quarter. On an annualized basis, we continue to target 2.5% of revenue, which we believe is a prudent amount, given the strength of our capital position and our desire to grow in such a large underpenetrated global market. As I look back over the last 12 months, I want to take a moment to recognize and thank the team for their efforts and commitment to Trupanion and to the vets and pet parents who choose us to support them. This team includes over 1,300 pet passionate individuals from across the globe, including our territory partners who serve as our frontline resource to veterinarians and their team. Collectively, we've grown our business to over $1 billion in revenue. We generated $83.5 million in discretionary income and added over 286,000 new pets. We developed and continue to evolve a more decentralized operating structure and moved key aspects of the business forward at pace. Most importantly, we continue to advance submissions to help the pets we all love receive the very best veterinary care. On that note, I'm proud to share that we're rapidly approaching an exciting milestone that serves as a testament to our mission. In a matter of days, we should cross over the threshold of 1 million subscription pets; that's a lot of lives helped and so many lives saved. This is why we do what we do. With that, I'll turn it over to Fawwad.

Thanks, Margi, and good afternoon, everyone. Having passed my first 100 days with Trupanion, I'm pleased to say that it's been a great experience working with the team. As I'm learning more about the business, I remain excited about the significant opportunities ahead. Today, I will share additional details around our fourth quarter performance, as well as provide our outlook for the first quarter and full year 2024. Total revenue for the quarter was $295.9 million, up 20% year-over-year. Within our subscription business, revenue was $191.5 million, up 21% year-over-year. Total subscription pets increased 14% year-over-year to over 991,000 pets, as of December 31, 2023. This includes approximately 40,000 pets in Europe, which are currently underwritten by third-party underwriters. Total monthly average revenue per pet for the quarter was $67.07, up 6.3% over the prior year period. As a reminder, this is inclusive of all North American subscription products and will reflect mix of business. Subscription business cost of paying veterinary invoices was $139.3 million, resulting in a value proposition of 72.7%, a 321 basis points sequential improvement towards our target over the prior quarter. As a percentage of subscription revenue, variable expenses were 9.6%, relatively consistent year-over-year and sequentially. Fixed expenses as a percentage of revenue were 4.7%, up from 4.1% in the prior year period, primarily due to investments in G&A. After the cost of paying veterinary invoices, variable expenses, and fixed expenses, we calculate our adjusted operating income. Our subscription business delivered adjusted operating income of $24.9 million or 13% of subscription revenue; this is up from 10.1% in the prior quarter or approximately 340 basis points of sequential margin expansion. Now I'll turn to our other business segment, which is comprised of revenue from other products and services that generally have a B2B component and a different margin profile than our subscription business. Our other business revenue was $104.3 million for the quarter, an increase of 19% year-over-year. Adjusted operating income for the segment was $2.6 million. In total, adjusted operating income was $27.5 million in Q4, ahead of expectations. This was up 15% from Q3 and up 11% from the prior year period. Our higher-value subscription business comprised approximately 90% of our adjusted operating income in the quarter. We expect this to increase as a percentage of total revenue as one of our partners in our other book of business Pets best, continues to roll off. This provides us the opportunity to move our investment dollars from lower value to higher value opportunities in our subscription business. During the quarter, we deployed $15.5 million to acquire approximately 67,000 new subscription pets. Excluding the approximate 3,400 European pets, this translated into an average pet acquisition cost of $217 per pet in the quarter. This compares to $283 in the prior year period and $212 in Q3. We also invested $1.7 million in the quarter in development costs. Stock-based compensation expense was $6.6 million during the quarter. As a result, net loss was $2.2 million or a loss of $0.05 per basic and diluted share compared to a loss of $9.3 million or a loss of $0.23 per basic and diluted share in the prior year period. In terms of cash flow, operating cash flow was $17.5 million in the quarter compared to $1 million in the prior year period. Capital expenditures totaled $4 million. As a result, free cash flow was a positive $13.5 million, an approximate $18 million improvement from the prior year's fourth quarter. Keep in mind that historically, we have seen seasonal fluctuations in free cash flow. With veterinarians typically implementing new rates at the beginning of the year, we see lower free cash flow in the first quarter. In a higher inflationary environment, as we are currently experiencing, this effect will be more pronounced. It is for this reason that we have set an annual free cash flow target. Turning to the balance sheet, we ended the quarter with $277.2 million in cash and short-term investments. Outside of our insurance entities, we held $46.6 million in cash and short-term investments, with an additional $15 million available under our credit facility. At the end of the quarter, we maintained $241.3 million of capital surplus at our insurance subsidiaries, which was $64.1 million more than the estimated risk-based capital requirement of $177.2 million. During the quarter, we took additional steps to improve the strength of our cash held outside of our insurance entities, including an ordinary dividend from APIC and shifting our building ownership. We intend to continue to make strategic use of our assets moving forward. One final point. As was noted in today's press release related to the 2023 annual audit, we expect to report in our Form 10-K two material weaknesses in internal controls. The first material weakness relates to information technology controls, primarily in the areas of user access and program change management over certain information technology systems. The second material weakness relates to internal controls over financial reporting pertaining to our other business segment. The 2023 audit remains open, and we are working with our auditors to complete the process. As a result, financial statements for the full year 2023 are preliminary and subject to the completion of the audit. Efforts to remediate these material weaknesses are underway. Now I'll turn to our outlook. For the full year of 2024, we are planning to grow revenue in the range of $1.241 billion to $1.273 billion. This is approximately 13% growth at the midpoint. We are planning to grow subscription revenue in the range of $842 million to $862 million, representing 20% year-over-year growth at the midpoint. We expect total adjusted operating income to be in the range of $100 million to $120 million, or 32% year-over-year growth at the midpoint. As we think about the shape of the year, our expectation is that similar to prior years, we will start the year from a lower margin standpoint within our subscription business and build back to a 15% adjusted operating margin by Q4 of this year. We will continue to be disciplined in our allocation of capital, and as our margins expand more meaningfully in the second half of the year, we will look to be more aggressive in acquiring pets within our higher-value subscription business while operating within our IRR and free cash flow guardrails. With that as context, I'll move to our Q1 outlook. Total revenue is expected to be in the range of $297 million to $302 million. Subscription revenue is expected to be in the range of $198 million to $200 million. This is 21% year-over-year growth at the midpoint. Total adjusted operating income is expected to be in the range of $21 million to $23 million. This represents nearly 42% growth year-over-year at the midpoint. Keep in mind that our revenue projections are subject to conversion rate fluctuations, most notably between the U.S. and Canadian currencies. For our first quarter and full year guidance, we used a 74% conversion rate in our projections, which was the approximate rate at the end of January. We expect this will amount to a neutral year-over-year foreign exchange impact. Thank you for your time today. With that, I'll hand it back over to Darryl.

Thanks, Fawwad. In a few weeks, we will be releasing my 2023 shareholder letter. These letters serve as a resource to gain deeper insights into our company, highlighting both our accomplishments as well as the hurdles faced over the past year. For those interested in learning more about Trupanion and how we think and act, I encourage you to read it. I'll also point out that we recently announced the date of our Annual Investor Day to be held September 18 here in Seattle. This marks a decoupling from our Annual Shareholder Meeting to be held in June. The intent behind the change is to facilitate greater in-person attendance and participation. We hope to see you there. With that, we'll open it up for questions.

Our first question today comes from Maria Ripps from Canaccord Genuity. Please go ahead with your question.

Great, thanks for taking my questions. I wanted to ask about your pet acquisition cost, which was down more than 20% for three consecutive quarters. Understanding that some of that is mix shift, could you expand on your thoughts on potentially becoming more aggressive on PACs, especially in some of your more profitable markets?

Yes, hi. Thank you for your question. This is Fawwad. A couple of thoughts on that. PAC is something that from a '23 perspective, the company reduced just given the inflationary environment. So we try to be very thoughtful as we think about 2024 and the shape of the investment in PAC. We would love to invest more, of course, where we feel like the returns are within our guardrails. We're trying to be very prudent and ensure that we see more of that margin expansion happens. So I would say in the first half of the year, we're a little bit more cautious until we see the realization of that. And then as we get into the second half of the year, we feel more comfortable; margins will expand as they've been continually expanding through the course of '23. And that's where we feel like we have an opportunity to do more and be more aggressive.

Got it. That's very helpful. And then secondly, is there any additional color you can share about your recent refiling with California? Can you provide the context of the 50% plus requested increase compared to the previous request, especially given that inflation has similarly stabilized since then?

Yes. Maria, it's Margi. Thank you for the question. As we think about California, this is again the typical cadence for us for rate increases as the cost of care rises over time. The rate approval in August was one that we got to allow us to continue to grow and meet our value proposition for a broader proportion of the population in California. As you mentioned, it wasn't all the way there since that time; the cost of care continued to rise through that year. This rate increase rectifies the gap that we have between our target value proposition and where we're currently trending. We're working with them to bring us to our value proposition and, over time, expect to get there. I would just also draw attention to the fact that our biggest competitor in the state of California had a rate approval of over 70%. So this is not atypical in this market that generally has higher access to care. This new rate request puts us to an average of a 13% increase over the past five years every year. So, 13% in California is effectively what we're seeing in our cost of goods, and that's what's reflected in the latest filings.

Got it. Thank you so much for the color, and congrats on crossing $1 billion annual revenue.

Thank you.

Our next question comes from Shweta Khajuria from Evercore ISI. Please go ahead with your question.

Thanks. This is Jian for Shweta. To follow up on the rate increase question, what type of expectations are baked into your full year guide? How much of the price increase do you expect to flow through the books this year? And then I have a follow-up.

Yes. So currently, we have 26% flowing through our book in terms of price increases for our members. We think about ARPU, our model is broken out by business unit. As we showed earlier, we've got a different mix of different products as we have new products coming into play. So the pricing does manifest itself in ARPU. As we think about that expanding sequentially every quarter, as you get more of the book of business receiving that higher rate increase. As I mentioned earlier, we have close to 300,000 members now receiving a 20% increase. We've got 26 flowing through on average. More of our top line is going to be driven in ARPU versus pet count at this point in time as we look to get back on track from a margin perspective, which is demonstrating the benefit of inflation on our book of business. Overall, we expect to see that shaping of the year starts to turn in terms of ARPU to 26% by the end of the year, assuming that inflation continues to be consistent at the 15% mark.

Got it. And the second question, can you discuss the Aflac partnership? Can you share why you're pivoting out of Japan to focus on the U.S.? Does that change your view of potential market expansion in terms of timeline or scope?

Yes, sure. Japan was one of the many countries that we were looking at at the start of our 60-month plan. It's something that we were exploring in conjunction with Aflac for a number of years. After the research we conducted with Aflac, we realized it's not an appropriate time for us at the moment. It's still an opportunity for the future. We mutually decided to redeploy our resources into other areas. It doesn't impact our decisions across Europe. The European progress is going well. We are happy to see that we've now expanded our total addressable market to 50,000 veterinary hospitals, which is a great opportunity for us. Overall, we feel like we've got a lot of room to grow in the space we're in today. So we're happy with our decision and remain positive about our partnership with Aflac.

Thanks a lot.

Our next question comes from Josh Shanker from Bank of America. Please go ahead with your question.

Hi there. Can you talk about these material weaknesses a little bit more? When were they noted, and do they impact prior year numbers? What was the genesis of this all coming together?

Yes. Hi, it's Fawwad. We take a finding of a material weakness very seriously. As we mentioned earlier, the audit is still open. Right now, we're focused on putting the remediation in place for these two material weaknesses, and that is a top priority for the company. We're also planning to further invest in controls and in compliance to ensure we meet our internal standards of robustness. As the company grows, we expect to continue to scale our processes and systems to ensure we're operating to high standards.

And Josh, to add, as of today, we are not aware of any issues related to financial results as a result of this.

Were the weaknesses discovered already present in the company in prior periods? Or did they emerge in this past year?

Josh, this is Darryl. As the company crossed the $1 billion mark, we've been increasing our scope and scrutiny across the company, so this was all areas of increased scope.

Okay. I noted that you mentioned among the high price increase cohort there is 98.28% monthly persistency. That's down a bit from 98.6% in 2022. Is there sort of a bottoming out? Or do you think that it could go lower from here?

Overall, 98.28%. This is something that we obsess over at Trupanion. It's a little bit lower than it has been. We now have around 300,000 of our members in counting that have gone through this process. It's a significantly higher shift than we typically expect. We feel good about where we are, and we'll continue to focus on this as we have an increased number of pets undergoing rate increases. I don't think it's symptomatic of anything else other than we've got a high number of people going through that rate increase.

Okay. Thank you very much for the answers.

Our next question comes from Ryan Tunis from Autonomous Research. Please go ahead with your question.

Hi. I guess I'm just looking for a qualitative discussion of where you view the subscription book in terms of rate adequacy today relative to the start of the year. Should we be thinking about a broadly similar year in terms of the rate activity taken in '24 compared to what you're thinking? Are there places where the rate need is higher today?

So far this year, we've seen the veterinary inflation coming in, in line with our expectations of 15%. We have 26% rate flowing through our book of business. Those two things combined mean that we are nicely on track at this point to get to our target adjusted operating margin of 15% by the end of the year. We'll continue to monitor closely, and refine our pricing to ensure as many of our members as possible are hitting that target. The more that we can get the rates across all of our cohorts, the more we can grow and expand. But as I mentioned beforehand, we will prioritize our margin growth before we start to invest into pet acquisition. Overall, I think that 15% inflation seems to be consistent with last year, and we feel good about the trajectory for the year ahead. Does that answer your question?

The next question comes from Jon Block from Stifel. Please go ahead with your question.

To start on the 2024 adjusted operating income guidance of $100 million to $120 million, the growth seems significant year-over-year. Fawwad, could you talk about what takes you to the low end versus the high end? What are the dynamics that take you to $100 million versus $120 million? It seems confident of 15% margin could land you at 110. Can you walk through those moving parts?

Yes. Thanks for your question. The guidance is informed by our subscription business, which has a majority of our revenue being repeatable. We expect revenue growth, paying attention to whether that revenue growth is accelerating or decelerating. Comparing growth rates from Q3 '22 and Q3 '23, you can see an accelerating growth rate. This, along with the sequential improvement in margin gives us some degree of certainty that we can achieve those numbers by year-end. There's going to be a seasonal aspect to our forecast. You'll see lower free cash flow in the first half of the year as rates are best put into effect. Given high inflation, we anticipate a more pronounced impact. So, we're forecasting down first quarter margins followed by sequential progress through the year. That's the thinking behind the guidance.

To touch on the inflation impact, if it goes from 15% to 18%, it can have a significant impact on margins. At this point, we feel good about where things are trending, which gives context with the guidance.

I can follow up offline. I've mentioned inflation increasing the demand for pet insurance, but I see your Q4 '23 gross adds were down year-over-year. How are you doing from a market share perspective?

As we're always going to operate within our guardrails, we've prioritized margin compression and focused on how much we have to spend to acquire pets. The team has diligently pulled back on PAC spend to identify areas of efficient growth. Lower acquisition costs leads to reduced lifetime value, which results in lower allowable PAC investments. Margins are expected to improve in the second half of the year, so we feel good about our future state. We see strong lead volume and conversion rates through our core channel.

The market hasn't shifted significantly; we still have the veterinary channel as a stronghold, and we feel good about our standing there.

Your total pets were up 2,000 Q-over-Q, but subscription pets were up 22,000 Q-over-Q. Can you reconcile total subscription pets and other pets being down?

Yes. We can follow up on that. Revenue through other business is typically opposite to subscription. We see accelerating growth in subscription and diminishing in other business. We'll provide more details on the lag between changes in pet count and how that manifests in revenue.

Good afternoon. Can you discuss the shift in building ownership?

Yes. We took an ordinary dividend, which increased our cash contributions based on higher interest rates. We shifted building ownership to free up cash for operating purposes in consultation with regulators. This was a prudent use of our assets and allows us to reinvest those dollars at higher rates of return to grow our business.

One of the reasons we bought the building was for this purpose, and we’re pleased to realize this opportunity.

How do you view the need for scale within the pet insurance industry? Would you consider any acquisitions?

We are very focused on core growth across different products and channels. We're prioritizing our own growth rather than pursuing acquisitions. We have significant opportunities within our existing structure and want to keep building those moats over time.

During the veterinary inflation period, we experienced margin compression, but we've observed margin expansion recently, and we prioritize free cash flow above growth. We're focused on ensuring we can deploy capital effectively at high rates.

We previously discussed freeing up capital through dividends and building ownership shifts, which has helped improve our operating cash. This is key for us moving forward.

And ladies and gentlemen, with that, we'll be concluding today's question-and-answer session as well as today's conference call. We thank you for joining today's presentation. You may now disconnect your lines.