Grupo Televisa, S.A.B. (NYSE:TV) Q3 2023 Earnings Call Transcript

Grupo Televisa, S.A.B. (NYSE:TV) Q3 2023 Earnings Call Transcript October 27, 2023

Grupo Televisa, S.A.B. misses on earnings expectations. Reported EPS is $-0.1 EPS, expectations were $-0.03093.

Operator: Good morning, everyone, and welcome to Grupo Televisa’s Third Quarter 2023 Conference Call. Before we begin, I would like to draw your attention to the press release which explains the use of forward-looking statements and applies to everything we will discuss in today’s call and in the earnings release. I will now turn the call over to Mr. Alfonso de Angoitia, Co-Chief Executive Officer of Grupo Televisa. Please go ahead, sir.

Alfonso de Angoitia: Thank you, Sheila. Good morning, everyone, and thank you for joining us. With me today are Wade Davis, CEO of Televisa Univision; Francisco Valim, CEO of Cable; Luis Malvido, CEO of Sky; and Carlos Phillips, CFO of Grupo Televisa. Wade, Valim, and Luis will discuss the operating and financial performance of each business they manage in their remarks. But before doing that, I would like to ask Valim to give you an update on the outlook of Mexico’s fixed telecom market and the cable strategy we are pursuing to achieve our goals. Under this plan, we are prioritizing free cash flow over an ongoing aggressive cable footprint expansion, particularly considering that we have the largest network in Mexico, excluding the incumbent ending September with 19.5 million homes passed, or a coverage of over 55% of total homes in the country.

Therefore, Valim’s mandate as recently appointed CEO of our cable operations, has been to improve quality and lifecycle of our subscriber base, enhance profitability, optimize CapEx deployment, expand free cash flow generation, and as such increased returns on invested capital. Having said that, let me turn the call over to Valim, as he will elaborate on our long-range plan.

Francisco Valim: Thank you, Alfonso. Good morning, everyone. Mexico’s fixed income market has already reached a more mature stage with fixed internet penetration at over 70% of homes. At the same time, customer needs have been shifting towards higher internet speeds, improved service equality, and digitized offerings. These changes in customer needs have led to a strategy of high-speed fiber networks deployment widely adopted by all market participants, which typically occurs during expensive economic cycles. Such net network expansions hinder financial returns, particularly under the current environment of high interest rates and intensified competition. Implying that CapEx deployment must be strategic, prioritizing return on investments.

Such market maturity combined with its current structure is likely to lead potential consolidation where we think that easy with its strong competitive stance. Given our strong brand, the highest net promoter score in the market, solid technological architecture, and the second largest customer base in Mexico is well positioned to play a leading role. The global macroenvironment and recent changes in the structure of the market where we operate call for reflection on our position, and most importantly, our role in the upcoming years. Our conclusion was that we need a change in our company’s management and strategy, which we have already started to implement. A deep assessment of our cable business suggests that going forward we should not focus primarily on rapid expansion and deployment of our network, but rather on an optimization strategy to generate value in our existing businesses.

Specifically, value generation in the market has been focused more on volume and less on sales quality. Manifesting through aggressive promotions driven by competitive dynamics resulting in, weak revenue growth, pressure on profitability, and soft free cash flow generation, and promotions that accelerated gross ads, but have been a double-edged sword as they have boosted churn and deteriorated sales quality. While some of our competitors continue to rely on this strategy, we firmly believe that this isn’t the path to maximize the industry value in Mexico, especially for ViX. This model which has led some of our competitors to financial challenges, becomes unattainable in a competitive and mature market as we’ve experienced in recent quarters.

In addition, our enterprise operations have failed to maintain one of its key contracts, while cost pressures due to inflation have hindered our profitability. This situation required immediate action to transform what has been a severe impact on our enterprise operations financials into an opportunity from 2024 onwards. Over the years, ViX has positioned itself as a leading player in the telecom market with the capabilities required to redefine the way in which value is created. Therefore, we believe there are strong brand having the highest NPS in the market and our almost 6.3 million loyal customers provide us with a tremendous opportunity to create value by focusing on the following areas. First, focus on customers retention and maintaining high satisfaction.

Second, pursue sales quality with higher speeds up to one gigabit per second, and competitive packages thanks to our superb network infrastructure. Third, proactively manage our subscriber base to maximize customer’s ARPU. Fourth, enhance our video offering to complement our value proposition. Fifth, efficiently grow our SME business. And six, carry out a full turnaround of our enterprise operations through our organizational restructuring and revamp commercial strategy and the renewed segmentation of our client base. This is strategic pillars are the core focus of ViX and have already become a reality with a reorganization of our management structure and the appointment of new hires to our executive committee. With extensive experience in telecommunications, including myself as CEO, Juan [indiscernible] as Chief Financial Officer; [indiscernible] as Chief Commercial Officer of our enterprise operations and Nina Mason as Chief Marketing Officer.

Changes in our top management team have been followed by an ongoing evolution of the company’s operating philosophy, supported by five strategic pillars. First, product offering. We are shifting our focus to local rather than national strategies. Growing places where we have a competitive advantage. We are enhancing our sales quality, aiming to provide higher speed bundles, and we are creating a unique video value proposition, focusing on the seamless aggregation of streaming platforms. Second pillar subscriber base management and tools. We are boosting big data and artificial intelligence tool. Have better management of subscriber base with a more — for more strategy and handle churn with a more proficient execution, prioritizing long-term value.

Third, sales channels. We are implementing a structural shift in our distribution channels, emphasizing digitalization, bringing us closer to high-value customers, and optimizing our subscriber acquisition cost. Fourth cost structure. We have implemented an in-depth review of our cost structure, both at OpEx and CapEx levels. On the OpEx front, we have already implemented a material headcount reduction with savings of around 12% of our payroll to be effective from the fourth quarter and rationalization of third-party providers. On CapEx side, we are working on improving inventory management, logistics, field operations, optimization of real estate, and rationalization on network expansion. As an example, of real estate optimization in November, we will complete the relocation of our headquarters to Grupo Televisa’s corporate building, allowing us to achieve significant rental savings.

Fifth and final pillar, enterprise operations and SME segment, where we see great opportunity to leverage our strong capabilities. So far, we have reorganized enterprise operation structure with the new leadership team already in place, carry out a re-segmentation of our customer base, optimize our cost structure by an immolate duplication of networks, revamped the value proposition of our SME segment, and renewed our focus on revenue and EBITDA growth. This changes in the company’s philosophy have also been accompanied by a shift in execution, launching a war room for the agile implementation of this strategy. These pillars, which represent the core of our strategy, resonate very well with our mature markets, especially for players with similar market share, where value creation lies in growing their share of wallet within their existing footprint and base, instead of having an aggressive and suboptimal market expansion.

We are confident to gradually recover the growth path and that our turnaround strategy will deliver results by already having sequential stability since the beginning of 2024. And not only growing our subscriber base, but improving our ARPU through both customer base management and higher sales quality. Moreover, show on experience in the recent quarters has been proactively addressed and is expected to come back to our historical levels, allowing us to better capitalize our growth. Altogether, our cost restructuring and a more strategic data-driven CapEx deployment process will contribute to maximize our returns, gradually translating into a reversal of EBITDA declines and substantial operating cash flow compound annual growth rate of around 10% over the next three years.

All-in-all, our 2024, 2026 long-range plan considers revenue growth in the low to mid-single-digits, which is inline with more mature markets, driven by subscriber-based growth price increases to pass-through inflation and product upselling. Profitability is expected to be at around 40% as the initiatives put in place to offset inflationary pressures gain more traction. Finally, a more focused and strategic network expansion plan of up to 400,000 new homes per year, and lower subscriber intake as we focus on sales quality and churn reduction will contribute to gradually take our CapEx to sales ratio down to low 20s from around 26% this year. Now let me walk you through our cable operating financial performance. We ended September with a network of 19.5 million homes, after passing almost 90,000 new homes during the third quarter.

We also delivered around 381,000 subscribers or homes connected gross adds, showing that demand for our service continues to be robust. However, we decided to clean-up our base, given the low-quality additions over the last few quarters, with subscribers that are very sensitive to price increases. These subscribers have skipped their monthly payments deadlines and have zero consumption for an extended period, allowing us to disconnect them. This cleanup translated into net disconnections of over 392,000 subscribers. During the quarter, revenue from our residential operations increased by 1.8% year-on-year, while operating segment income fell by 7.3%. Our reservation operations margin of 37.9% contracted by 380 basis points year-on-year, mainly driven by inflationary pressures in labor and content-related costs.

However, there were headcount reduction implemented the third quarter with savings around 12% of our payroll. We’ll allow us to expand our residential operations margin by around 200 basis points in the fourth quarter. Our enterprise operations accounting for roughly 12% and 7% of our cable segment revenue and operating segment income respectively continue to face challenges. During the quarter, revenue fell by 24% while our enterprise operations margin of 18.7% contracted by 680 basis points year-on-year. Still, as we discussed earlier, the enterprise operations reorganization on the implementation will position us well to stabilize and grow revenue on operating segment income from 2024 onwards. To sum up revenue from our cable segment of Ps12.1 billion fell by 2% year-on-year, while operating segment income of Ps4.3 billion declined by 12%.

Our cable segment margin of 35.6%, contracted by 400 basis points year-on-year.

Alfonso de Angoitia: Thank you, Valim. You’ve put together a great plan and a great team. Now let me turn the call over to Luis Malvido, CEO of Sky.

Luis Malvido: Thank you, Alfonso, and good morning, everyone. I’m pleased to present an update on Sky’s third quarter operating and financial performance. But before getting into the numbers, I’m thrilled to announce a significant milestone achieved by Sky. During the quarter, we introduce Sky Mass, a groundbreaking product from Sky Mexico. Sky Mass is an Android based streaming platform developed entirely in our own laboratories that seamlessly integrates all Sky TV, VOD and OTT content in a unified viewing experience on a single screen. Sky Mass eliminates the needs for a dish or specific installation requirements and can run over any broadband network. Besides leveraging on the power of artificial intelligence, our cutting-edge search and recommendation engine creates content for each member of the households, eliminating the need to switch between multiple OTTs. Furthermore, Sky Mass is the only platform in the market that offers live sports event in true 4K quality and provide the option to extend this experience to any mobile device including cell phones, tablets, and laptops.

Sky Mass currently integrates Universal Plus, Disney Plus, Star Plus, HBO Max and VIX Premium, along with all linear channels and all partners entire libraries solidifying our position as the comprehensive and dynamic content provider in the ever-evolving digital landscape. Sky Maas stands as the premier broadband agnostic platform for the Mexican Sports Enthusia, offering a comprehensive collection of all major worldwide soccer leagues and tournaments in one place. Early this month, we successfully launched Sky Mass marketing campaign targeting new and existing Sky customers. This campaign not only boosted brand awareness, but it’s also fueling promising sales growth. Today, we have added 36,000 units and the momentum is still on the rise.

Shortly, our Sky mass offer will be boosted when bundle with Sky Internet. Our digital transformation strategy is well underway, unveiling an array of disruptive new products that are quickly gaining traction in the market. This innovative portfolio not only underscores our commitment to innovation and our efforts to enhance our competitiveness, but also reflects our dedication to delivering the best to our customers. Now in terms of trading, we experienced a decrease of 227,000 units during the quarter, mostly coming from prepaid. However, this decline was partially offset by 29,000 positive net ads of new products and 5,000 in Central America, where we score positive net ads for the first time in many quarters. Now let me walk you through the financial results for the quarter.

Third quarter revenues declined 13.8% year on year, reaching Ps4.3 million. This decline was primarily driven by the affirmation DTH’s driver base drop, and a lower recharging frequency partially offset by the price increase in Postpay video implemented in May. Furthermore, operating segment income in Q3 decreased by 9.9% year on year, reaching a margin of 35.7%. The decline is attributed to lower revenues, mostly in prepaid, which were partially of offset by a drop-in cost of good solds and operating expenses due to the successful implementation of efficiency measures across our operations. As you may recall, last year, we developed an ambitious digitalization and simplification program, aim at improving efficiency and still inline processes across the entire organization while enhancing customer experience.

As of current update, this program is projected to yield an impact of Ps805 million in 2023, representing over 4% on full year revenues. Regarding our capital expenditure, we invested $114 million year to date, indicating a substantial 29% decrease compared to the previous year. This reduction in capital intensity can be attributed to the strategic measures we undertook to enhance return on investment, inventory rationalization, along with the successful implementation of the Simplification program mentioned earlier. Finally, as a metric that underscores the positive impact of these efficiency measures is a beta minus CapEx year. To date, this indicator has witnessed a year on year growth of 16.7%, searching from Ps2.2 billion to Ps2.57 billion.

Alfonso de Angoitia: Thank you, Luis. Given the operating and financial performance, our two core consolidated businesses, Grupo Televisa consolidated revenue reached Ps18.3 billion, representing a decline of 4.9% year on year. While operating segment income reached Ps6.4 billion, equivalent to a year on year decrease of 8.8%, mainly driven by the lower revenue and inflationary pressures. Below operating segment income, we had non-recurring severance expenses of around Ps830 million related to the headcount reduction implemented in cable during the third quarter. Still, this measure will bring savings of around 12% of our payroll, allowing us to expand the residential operations margin in cable by around 200 basis points in the fourth quarter.

Moving on to Televisa Univision before getting into its third quarter operating and financial results released on Wednesday morning, let me remind you that our 44% stake in this company is a very important value component for Grupo Televisa’s shares. Using proportionate consolidation, Televisa-Univision would contribute almost 40% of revenue and EBITDA during the third quarter, making it the second largest proportionate contributor to Grupo after our cable operations. The Televisa-Univision delivered another strong quarter of double-digit revenue growth, underscoring the strength and flexibility of our unique, fully-integrated ecosystem across complementary platforms and geographies. Having said that, let me turn the call over to Wade Davis, CEO of Televisa-Univision.

Wade Davis : Thanks Alfonso. I am really happy to be here with you all and to spend some time discussing TU’s performance. It was a great quarter for us, where we hit a number of high watermarks operationally, delivered significant progress on our strategic priorities, and therefore produced fantastic financial results. But I want to start by highlighting how unique our company is, and in particular, the unique economic opportunity we are pursuing. We are the only company at scale touching all Spanish-speaking media markets globally. This is an $8 trillion GDP, and over half of that is represented by the Mexican and U.S. Hispanic markets, where we are the definitive leaders, and both of these markets are seeing remarkable growth.

In fact, The LDC and Wells Fargo released their annual U.S. Hispanic market report, which highlighted that the U.S. Hispanic GDP grew double-digits to exceed $3.2 trillion last year, making it the largest Spanish-speaking market in the world, the equivalent of the fifth largest national economy, but also the fastest growing economy in the world. And we are the only scaled company that’s a pure play on the global Spanish-speaking consumer. Executing against this opportunity, we delivered double-digit revenue growth and an impressive 58% year-over-year improvement in D2C losses, which led to flat consolidated EBITDA. And underpinning these financial results was incredible success from an audience perspective. In Mexico, we held both the number one and number two networks for the first time in history.

In U.S. our market share reached a nine year high of 65%. And in streaming, we surpassed 40 million monthly average uniques. This is the remarkable company we created, when we brought Univision together with Televisa’s content business, a fully-optimized content engine that can power multiple platforms across the global Spanish-speaking market and deliver market-leading audience outcomes. And we can do it efficiently enough to create a new streaming business with hundreds of millions of dollars of year one revenue and nearly no consolidated EBITDA degradation. Our 11% revenue growth this quarter was supported by all geographies. In the U.S. business, we saw the highest Q3 revenue in the history of the company. In Mexico, we posted double-digit revenue growth, which we have done every quarter since our merger.

And if we adjust for the U.S.’s mid-term political ad sales from last year, we saw growth across all lines of business in all regions. although the overall U.S. ad market remained relatively soft this quarter, our U.S. ad sales rose by 3%, excluding political and advocacy, which represents an outperformance of the broader market by 800 basis points. Based on Magna as reports. This is an expansion from our 600 basis points of outperformance last quarter. In Mexico, we had an amazing ad sales quarter where the combination of new client activations and new advanced solutions coming online in Mexico led by streaming inventory on ViX, drove strong continued growth. Subscription and licensing revenue grew 18% this quarter, and this was driven by ViX’s premium tier, which more than offset some linear sub softness.

We’re also seeing early growth contribution from licensing our new original ViX programming outside of our core markets. Our singular focus on Spanish language presents us with significant licensing opportunities globally without putting any competitive pressure in our primary markets. This quarter, we narrowed our D2C losses by nearly 60%, and we continue to have direct line of sight to our target of D2C profitability by the second half of 2024. This is now only nine months away, and when we deliver this, ViX will have had the shortest ramp to profitability of any major streaming service in history. And we can do this because of the unique content costs and the powerful marketing advantages we’ve created with the combined Televisa Univision business.

We have a massively scaled, fully vertically integrated business operating across multiple platforms and leading in the largest Spanish speaking markets in the world. And our relentless focus on efficiency manifests on an overall consolidated basis with the highest operating margins in the industry. But this will be further underscored as we continue toward D2C profitability where we believe our margins will also be best-in-class. We built one of the world’s most efficient and prolific long form video content engines. Our huge vertically integrated infrastructure has been constantly producing the full capacity guided by sophisticated analytics and insights and optimized to power all of our platforms through innovative windowing and production strategies and allowing us to maximize the value of our rights and intellectual property.

The volume and efficiency of our content enables us to pursue a strategy of investing in and optimizing both linear and streaming, and programming each platform for what it does best. Linear is designed around cultural and habituated viewing with live soccer, tent poles, high volume novellas, and appointment viewing like morning and evening news. While streaming is designed to deliver high intent viewing around our original movies and series, a massive volume of live exclusive soccer that’s indispensable for a serious soccer fan and a huge volume and range of niche content to service a more nuanced Latino audience. For linear, this strategy continues to pay off across both geographies. In the U.S. our television networks delivered the highest primetime Spanish language market share in nearly a decade at 65%, of 500 basis points year-over-year improvement.

This came from a clean sweep of all four primetime slots with our original scripted novellas and record setting live events in both sports and music. In Mexico, our content was so compelling that we actually drew audiences back to television and saw levels of total television usage not seen since the pandemic lockdown. This quarter, our secondary network, Channel five, registered its highest viewership in five years and on a relative basis, surpassed our main competitors for the first time in history, giving us both the number one and the number two broadcast networks in Mexico this quarter. For ViX, this strategy is allowing us to expand our reach and serve younger audiences that have not been historically well served by linear television.

And clearly, this strategy is working with massive year-on-year audience growth hitting over 40 million monthly average uniques on the free tier this quarter, with 60% of that audience unique to the streaming platform. And importantly, a 2-tier ecosystem, we needs to exceed expectations in terms of productivity with the free funnel delivering a high watermark of two third of our gross new subscribers this quarter. While we have different programming strategies for each platform, we think of the ecosystem as a whole and how to use two platforms to complement each other. And Q3 had some fantastic examples of these two platforms working in concert. On the entertainment side was La Casa de los Famoso, a Mexican reality show, where we produced different and complementary content for streaming and for linear.

The linear show is the traditional twice weekly live reality show that aired on Channel five. For streaming, we produced separate content that was pitched from linear and included multiple live 24-hour feeds that drove always-on engagement for the super fan. We were able to produce a huge volume of content at incredibly low-price points per hour, and we’re able to cross-promote the two platforms and experiences to create enormous reach and engagement on linear, where the show propelled our Channel five network to the number two position in Mexico. And on ViX, we saw free tier audience levels that rivaled the World Cup from last year and it drove the highest level of attributable move subscribers in both Q2 and Q3. The strategy also works really well for us with sports.

As previously mentioned, we had the Gold Cup this quarter. The rights fees for that property included a massive number of games. Some of the early games made sense to put on ViX free in front of the paywall to build awareness for the tournament. And as we got further into the tournament, we move games behind the paywall in ViX to drive subscribers. And having used ViX to build engagement and reach with games that we couldn’t have otherwise aired on the linear because of limited shelf space, we were then able to push a massive audience to linear for the playoffs and final stage games to deliver the highest ratings for any soccer tournament this year. Nearly everything we do from a content perspective contemplates a combined linear and streaming ecosystem.

This helps with audience flow, cross-promotion, content efficiency while maintaining the integrity of an ecosystem with our distribution partners. Obviously, this quarter saw some tension between programmers and distributors in the U.S. around the levels of content overlap between linear and streaming. And that’s causing the industry to evolve. The composition and positioning of our platforms is nonoverlapping and complementary positions us extremely well for these dynamics. This has evolved significantly and progressed operationally since we launched it a little more than a year ago. Remember, we launched the service a handful of months following our merger which meant that the underlying service was really launched as minimum viable products, and our real focus at launch was on content quality and programming.

And we’ve continued to consistently roll out incredible original content, but we’re also making significant progress in bringing the underlying product features to basic parity. Improved content recommendations, multiple profiles and casting are all great examples of really important features that are only coming online now and already having big impacts on incremental engagement and retention. We also grew our distribution footprint this quarter. Previously, we only covered about 60% of the connected TV market. This quarter, we added Vizio, LG and HiSense, grants to nearly 100% coverage of connected TVs. And this week, we’re launching Mercado Libre. Mercado Libre is the market leader in e-commerce in Latin America and is one of the largest sources of streaming subscriptions in the region.

As one of the only pure-play companies delivering on the massive global Spanish-speaking consumer economy, we continue to deliver above market levels of growth and industry-leading profit margins. Our unique content engine continued to deliver hits at scale, attracting record audiences across all platforms in all geographies. And our investments in streaming are paying off, both in terms of revenue, scale and in terms of improved profitability. It’s a really exciting time to be at TU, incredibly proud of what our team has delivered this quarter, and I’m even more excited for what ahead. And with that, I’ll turn it back over to Alfonso.

Alfonso de Angoitia : Thank you, Wade. To wrap up, the global macro backdrop has been more challenging than initially expected. Therefore, Bernardo and I, together with the rest of the executive team at Grupo Televisa have been putting a lot of effort on deep rethinking and restructuring of our consolidated businesses that will allow us to come out stronger from the current environment. These structural reforms are focused on protecting profitability, optimizing CapEx and enhancing free cash flow generation. At Televisa, Univision together with our partner, Wade Davis, we continue to execute our digital transformation strategy, which has been delivering outstanding results. Our top-performing content and high complementary linear and streaming ecosystem position as well to continue outperforming the market in both yield and financials.

Moreover, we have successfully been scaling our DTC business with revenue approaching over $700 million annually and are on track to deliver profitability next year which is an unprecedented time frame for any major streaming service. Now we’re ready to take your questions. Operator, can you please provide instructions for the Q&A?

Operator: [Operator Instructions]. Today’s first question comes from Fred Mendes with Bank of America. Please go ahead.

Fred Mendes : Good morning. I have two questions here on my side. The first one is related to cable and Valim already in the beginning of the presentation. You addressed some of the points. But the main one is the strategy, right? It looks like there has been a major shift in the strategy, which will agree with the new one. But I’m just — I believe that should take some time because — I would assume you don’t need change only the first layer of people. We need to change the second year. Previously, it was more growth, not something more related to cost and increasing free cash flow. So, the concern here just how long it’s going to take for you to have this completely shifting strategy at the start to work out on the cable front.

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Q&A Session

That would be the first one. And then the second one that goes to the mix, the numbers are increasing. It looks like it is performing well. Looking for 2024, what are the three main metrics that you’ll be looking at and you should be looking at in your view? And in the long time, say, three years to five years, how do you see ViX? You think that’s going to be a company that grows high single digits as the margin rate cash or is going to be more like a target for other players, larger players given the value in this niche player that ViX operates. Thank you very much.

Alfonso de Angoitia : Yes. Thank you, Fred, for your question. You’re right, there has been a shift in our cable strategy, and I’ll ask Valim to go that shift.

Francisco Valim: So, Fred, the idea here is because we have already done a lot of the layoffs that we are planning to do, and we’re streaming every opportunity. We should see results materialize starting in 2024. So, this is — this could be, very quickly. And the idea here is to maximize cash flow generation by still improving revenues in low middle single digits moving forward and maintaining margins around the 40% range, EBITDA margin, I mean, — so I think this — and the things we think will be accomplishing starting 2024.

Alfonso de Angoitia : So, it’s all about CapEx optimization, free cash flow generation. That’s a material shift in the strategy. And as to your second question, Wade has done an amazing job at the Televisa Univision and specifically at lounging ViX. So, I’ll ask a way to go over, as you asked about the three main metrics.

Wade Davis: Thanks, Anton. Thanks for the question. So, I think the first thing I would say is that you should focus on the overall performance of the business. As we’ve said a number of times, we think of and we run ViX as an integral part of a complementary linear and streaming ecosystem that’s fully aligned. And so, the overall focus should be on the performance of the company as a whole — from a revenue and EBITDA growth standpoint. ViX is going to continue to be a key engine for revenue and EBITDA growth of the consolidated business going forward. And so, as that emerged from reporting standpoint, focus on the core revenue and EBITDA of the D2C business inside the overall business will be important. But if you’re looking for more specific the, I’d say the top three operating KPIs for the D2C business, I would probably put it in three categories.

First is a metric focused on audience engagement. Second would be a metric focused on marketing efficiency. And third would be metrics focused on the effectiveness of our monetization of the audience. And as we get into 2024, we’ll be rolling out metrics that cover those three areas, just to help investors understand the consistent and predictable march towards the profitability targets that we have laid out. There was a second part of your question about ViX, which I didn’t understand. Could you repeat that?

Fred Mendes : No. Perfect. Basically, I mean, in the long term, do you see ViX projections you have, you see ViX as a stand-alone player, let’s put that way, growing let’s say, high single digits and generating cash? Or you believe that mutually in the future, ViX going to be of great value for other players, larger players given the niche of the Hispanic market that it operates and it could turn into a and M&A target from other players? Thank you.