Spark Networks SE
Q4 2020 Earnings Call Transcript

Published: 31 Mar 2021

[Operator:]

Good afternoon, ladies and gentlemen, and thank you for waiting. Welcome to Spark Networks' conference call to provide the company's preliminary results for the second half and full year 2020. This call is being recorded. We are broadcasting live in listen-only mode. I would now like to turn the conference over to Chris Camarra, VP of Investor Relations. Mr. Camarra, you may begin your conference.

[Chris Camarra:]

Thank you, operator, and thank you, everyone, for joining us this afternoon. With me on this call is CEO, Eric Eichmann; and CFO, Bert Althaus. As a reminder today, we published our second half and full year 2020 financial results, which can be found on our Investor Relations section on the company's website at www.spark.net.

[Eric Eichmann:]

Thank you, Chris and thank you to all our listeners for joining us on the call today. This call will be our first official call as a domestic filer. Therefore for today's call and for all future earnings calls, Spark will be reporting our financials in US dollars and utilizing US GAAP reporting. This will also mark the first of four reports in 2021 as we will now be filing on a quarterly basis instead of biannually. This increase in transparency, coupled with a more robust shareholder communications program, will provide investors with greater insight into the company in 2021. Management intends to participate in approximately six investor conferences this year, while conducting quarterly roadshows with both current and prospective stakeholders. As many of you know we announced that our CFO, Bert Althaus will be exiting the company. I would like to thank Bert for all his contributions to Spark. Bert has been an integral member of our executive management team since joining the Spark team in 2019. We have worked closely during my tenure as CEO and I appreciate his leadership in building a strong financial foundation here at Spark. We are actively looking for a new CFO. Bert will support Spark during this transition period. 2020 was a unique time for the company and everyone around the world. I am pleased with the way that Spark responded to the challenges brought about by the lockdown and social distancing restrictions. Our employees have remained efficient and flexible as the work-from-home and office attendance has fluctuated. While the circumstances created hurdles for online daters, our business remained largely COVID resilient. As we come out of this pandemic, we are confident that our brands will emerge stronger as people will seek to establish new and meaningful connections.

[Bert Althaus:]

Thank you, Eric. To reemphasize sentiment, the previous year was the time focused on stabilization and development. Financially the company concentrated on profitability, primarily driven by increasing marketing efficiency and the optimization of cash flow. Total revenue for the fiscal year ended 2020 was US$233 million, increase of US$62.1 million, compared to $117.9 million in 2019. Registrations and average payment subscriber increased 16% and 27% respectively from 2019 to 2020 related to the Zoosk acquisition in July 2019. In 2020 month to the ARPU remains on the same level as in 2019, when eliminating the acquisition accounting effect on Zoosk revenue in 2019 of $12.9 million. On a pro forma basis, revenue declined by 7% from $250.7 million in 2019 to $233 million in 2020. Revenue for the second half of 2020 was US$118.9 million, an increase of US$3.9 million compared to US$115 million in the second half of 2019. The increase in revenue for the second half of 2020 is primarily attributable to a one-time effect from the acquisition accounting in the second half of 2019 up $12.9 million and compensating top line of approximately US$8.5 million effect from the reduction of marketing expenses. The decrease in marketing spend led to a decline in average paying subscribers of 7% and the total registration of 13% from the second half of 2019 to the second half of 2020. Spark's marketing contribution increased by $42.7 million from $75.3 million in 2019 to US$118 million of 2020 by fully consolidating Zoosk. For the second half 2020, it increased to $60.6 million, an increase of $8.6 million when compared to US$52 million during the second half of 2019, due to more efficient marketing spending. Adjusted EBITDA increased from $10.3 million in 2019 to USD$37.7 million in 2020 because of consolidation of Zoosk for full 12 months. Higher marketing efficiency and centralized operations in building based headquarter. Net loss for 2020 was USD$46.6 million, compared to a net loss of $34.9 million in 2019 due to the impairment of goodwill and intangible assets of $20.3 million in 2019 and $51.2 million in 2020.

[Operator:]

Thank you. We will now be conducting a question-and-answer session. Thank you. Our first question comes from Kara Anderson with B. Riley & Company. Please proceed with your question.

[Kara Anderson:]

Hi, good afternoon.

[Eric Eichmann:]

Hey, Kara.

[Kara Anderson:]

Hey, I'm wondering if you….

[Bert Althaus:]

Good afternoon.

[Kara Anderson:]

….could provide further color around the subscriber and ARPU expectations embedded in the guide for this year?

[Eric Eichmann:]

Sorry, let me just -- I wasn't sure I heard you right. Further color on the ARPU expectations for this year?

[Kara Anderson:]

The balance between subscriber growth and ARPU embedded in that guide for topline growth?

[Eric Eichmann:]

Bert, I don't know if you want to talk about it, let me just maybe say a couple of things. One, obviously, from just our main service, we don't expect a dramatic change in ARPU. That has been something that -- even when you consider the 2020 versus 2019 sort of differences, they were driven by events that were not really driven by the core offerings. We are, however, introducing a new service on Zoosk with live streaming with The Meet Group and that in itself could sort of bring ARPU up. And we are also as we do every year testing pricing -- different pricing mechanisms. Something that we haven't done as much on Zoosk obviously we just integrated the platform. So, those two elements could lead to improvements in ARPU in particular in Zoosk, but we have not I don't think assume meaningful improvements there. Bert do you want to add anything to that?

[Bert Althaus:]

Yes. No, I can -- I agree with you on the ARPU side. Of course, we -- as mentioned before, we are checking on the pricing on a frequent basis to optimize our pricing to also that has an impact on ARPU of course. But overall the way we see the topline development really comes from additional subscribers.

[Kara Anderson:]

Got it. And then can you guys talk a little bit about the EBITDA stability that you're calling out? Can you give a little bit more detail on the investments we're expecting to make?

[Eric Eichmann:]

Yes. So, we -- as we've said I think now for a while, it's important for us to continue to evolve our offerings. We talked about some of the things that we're intending to do going forward, some of them obviously related to social dating. It's very exciting because what you're seeing in the pandemic is that a lot of offline activities have moved online and they're very relevant to dating platforms, right? So, today on Disney Plus you can watch a movie with somebody else, you can -- and maybe many of you go to Clubhouse to listen to conversations. In the office, for example, to get together with others, we use tools like which allows you to sort of basically meet people more informally. And so all of those things I think are going to be part of what we expect to start integrating and thinking about which make our platforms more sticky. So, as we continue to look at that, I think one of the things that we realized that we need to invest more in our product. We started that process in H2 of last year -- in the second half of last year and we will continue to do that this year. Those investments generally are positive ROI investments, but they are more mid-term investments in terms of getting the full benefit of it. And so on the short-term it sounds -- it's more like an investment that hurts immediate profitability. But on the long-term, they are very high ROI investments from our perspective. So, that's why what you have in 2021 is a meaningful increase on the topline, but a bottom-line EBITDA that's more stable versus an increase. Does that address the issue Kara?

[Kara Anderson:]

Yes, that's helpful. And then can you talk about the economics of the live streaming with ParshipMeet Group?

[Eric Eichmann:]

Yes. So, it's an exciting offering that has been sort of proven out there in the marketplace is something that gets people excited. The economics just so that people understand the models there will be live streamers that are part of the network including The Meet Group and other properties like PlentyOfFish. And Zoosk users can come in watch the streamers. And if they so choose, they can buy tokens or diamonds to offer the streamers at different points in time. That is a purchase that's gone through the Zoosk platform and there is an agreement to share those revenues with The Meet Group.

[Kara Anderson:]

Got it. And then can you touch a -- totally different topic, but can you touch a bit on safety and how your brands compared to others out there especially in the context of your larger peer match recently adding that background check technology for their users?

[Eric Eichmann:]

Yes. Look, I think it's great that these things are happening. As you many of you know one of the challenges that we have as an industry is making sure that safety is one of the main things that we have. We're adding a number of things from the fraud perspective to our platform. We're looking at different ways to do background checks. I think that's important. And so I think this is just an evolution towards that and we think about it more as a service that we offer as opposed to a revenue opportunity for people to go out there and be able to trust that they're meeting people that are safe and that our platforms provide sort of that kind of service.

[Kara Anderson:]

Got it. Thank you so much. That’s it for me.

[Eric Eichmann:]

Yes. Thank you, Kara.

[Operator:]

Thank you. Our next question comes from Austin Moldow with Canaccord. Please proceed with your question.

[Austin Moldow:]

Hi. Thanks for taking my questions. As it pertains to the live streaming agreement --

[Eric Eichmann:]

Hi, Austin.

[Austin Moldow:]

Hi. As it pertains to the live streaming agreement will Zoosk be opened up for more robust free usage to give more users access to the streaming?

[Eric Eichmann:]

So the idea at this point is that the Zoosk users will have access to the streaming and will be able to see other profiles. And so part of it's not just about the stickiness of the offering and being able to spend more time on the platform and coming back, but it's also about informally which goes to the social baiting theme that we've talked about in the call which is really about meeting other people. So you can see the profile of other people and if people agree then you can meet and chat separately with those people. So hopefully not only will it be, sort of, better again in terms of bringing people back and getting them more involved on the platform going beyond the search and match functionality that we offer, but also getting them to meet with new people in a more informal setting. So we're excited about that.

[Austin Moldow:]

So it will just be available to Zoosk subscribers, but not to someone who downloads but wants to use a free membership?

[Eric Eichmann:]

So, I think, Zoosk users can -- will be able to access the live streaming service and they will be able to connect with other Zoosk users as part of it.

[Austin Moldow:]

Do you have to be subscribed?

[Eric Eichmann:]

I don't believe that you have to be subscribed. I do believe that you have to be subscribed to purchase, but let me get back to you on that. It's something that we're thinking about at this point, yes.

[Austin Moldow:]

Okay. And will you be trying to attract users that stream regardless of their willingness to date or what's your thought process on usage?

[Eric Eichmann:]

Yes. I mean, I -- look we're very happy for people to stream. We would like nothing, but people becoming celebrities on the live streaming platform. What generally tends to happen by looking at this is that you have a number of streamers that drive the majority of the usage that become big celebrities on the platform, but it's open for people to stream. So again, we're hoping that that would happen. Look the one thing that's clear in this offering is that people that, sort of, are watching the live streaming are single right because they come to Zoosk as a dating platform. And so when you think about that that's one thing that unifies them and that drives the interest. And so generally the people that come to our platforms are single. I think they self-describe themselves as single. And so that seems to be a requirement if you will as you come in.

[Austin Moldow:]

And just can you define social dating a little bit? Like how does that differ from the previous strategy? And how is it different to what your peers are doing?

[Eric Eichmann:]

Yes, great question. So look I think some of this has been very much accelerated by the pandemic and the fact that people had to stay home, they had social distance. And so what's been happening is, I think, people more and more have started to conduct more social activities online, right? So you might have wine tasting events that happen online. You might have gatherings -- I had as you that in itself if you think about it a way to meet new people that's transferring off online which was offline before. And so there's been a social discovery sector that has grown because of this need to meet new people. Now it's grown at large because some people just want to, sort of, get to know new people, socialize and not necessarily looking for date. But when it relates to dating it's one of the core propositions that we bring to consumers. The path or if you will if you think about the traditional functionalities really setting up a profile, providing matchmaking capability and algorithms for you to be matched with other people you might start a search as a single person on the platform. And once you're matched then you can connect. And most of that connection happens through chat, which then of course can end up being meeting offline both on the sort of meeting new people. And on the connection there's been development that are so far dating developments. On the connection it's going to events potentially playing games with other people. It's sharing a live stream with somebody else in talking to them looking at their profile and being interested. And so there's more ways to connect that are more informal that don't require you to just do the search, which is very directed behavior. So we think that that's very exciting because it will make our platforms a lot more sticky and people will come just because they want to check what's going on Zoosk and they're in the process of finding somebody as opposed to going through just pure search. They can meet people more informally. They might, sort of, do it in the game. They might do in on a movie night evening that they do online as opposed to doing it the way that you traditionally do it. And then the other thing is you can also connect not just through a chat you can do a video chat, but that's pretty advanced. That's pretty -- you have to feel pretty confident you're at that stage, but you can also potentially watch a movie together. You can play a game together. You can go to an event. You can do a museum tour together. So there's lots of events like this that could very much enrich the experience and make it a lot more natural for you to meet people. And I think that's the big difference from what continues to be core to the experience, of course, is the search and match functionality to one where you have many more ways to meet people online in these platforms.

[Austin Moldow:]

Got it. That's really helpful. And just a really quick follow-up to that. These experiences, like movie watching and museum viewing, comedy show, is that part of the meet live streaming experience, or is this a separate video product that you'll be developing?

[Eric Eichmann:]

So these are -- I wouldn't say at this point that we have specific plans to develop, but these are things that are happening online today that can be integrated. They're not part of Meet Group sort of live streams. Live streaming service is the live streaming service, but I believe that there are many offerings out there that you can sort of reach out and incorporate within your offering, either developing it ourselves, or looking at partnerships with other parties.

[Austin Moldow:]

Okay. And very last question. That revenue share on the purchasing activity for being your users, is there a number there that you'd be able to share what - -how much of the economics you'll be taking?

[Eric Eichmann:]

Yes. I mean, not on the economics, obviously, that's confidential. But I would say, look, we're excited. I mean, I would say, first and foremost, we're excited about bringing sort of a lot of activity that will make our Zoosk platform more exciting to people, bringing them back. It could potentially have a positive impact on retention. We don't know yet and we'll see how it evolves. But my expectation is, this will be well received by our users. Some might not be interested. But if we get a meaningful portion of our consumers interested in it, it could be a very good thing for the platform.

[Austin Moldow:]

Okay. Thank you for the color and good luck.

[Eric Eichmann:]

Yes. Thank you.

[Bert Althaus:]

Thank you.

[Operator:]

Thank you. Our next question comes from John Lewis with Osmium. Please proceed with your question.

[John Lewis:]

Thank you, Eric and Chris and Bert. So, I guess, I'd start with congratulations for really --

[Eric Eichmann:]

Thank you.

[Bert Althaus:]

Thank you.

[John Lewis:]

-- persevering, doing great in COVID and solid numbers today. And it sounds like you've got your feet well set for 2021. So that's great to see. As a long-time industry watcher, it feels like we've gone from 400 competitors really to 4, which are Bumble, Match, Parship and Spark. And as I look at the math, I think the industry out of the big four are spending about $900 million a year in customer acquisition and you guys are about 14% of that. So you guys are spending basically the same amount as Bumbles around $125 million. I think you guys spent $115 million in customer acquisition. And so, I guess, when I really take it, I'll get to the question, but I'll just give you how I'm thinking about it. When I aggregate up Match, Bumble, Parship and Spark, it's about $4.3 billion in annual revenue and the public market valuation is about $50 billion. Spark is about one-half of 1% of the industry value, but about 6% of the industry's revenue and about almost 14% of the industry's marketing budget. So your marketing budgets punching way above your weight. Your revenue is far above. You're punching above your weight. And so when I look at the industry, I'm not saying you guys are Bumble or Match, but you guys are trading at about 1/12 evaluation. And so, I think one of the questions that I have is, registering almost 15 million daters a year really opens up a lot of retargeting opportunities, win backs. Can you just talk about what you're doing with all the registrations and how you could leverage that data to help here?

[Eric Eichmann:]

Yes. Yes. That's a great question. I appreciate the data you shared with us, John. So I would say a couple of things. First off and, obviously, at the company, we're trying to do everything to have a valuable company as possible. And last year and today is one of the important events, we focused on; one, making sure we had covenant flexibility to invest in the company and we'll talk about a bit about that. I think it is about sort of increasing retention and driving more people into our platforms and taking advantage of that 50 million, sort of, users that we see. Another thing that was important for us was establishing more transparency with investors. And so, by becoming a domestic filer, you'll hear from us four times a year with numbers. We'll be able to discuss the trajectory of the company, something that was harder to do last year, as we were a foreign filer with 20-F. So I think those are important and very important as part of it too, and I always thought it was an important component of the story at Spark was to show top line growth. And our guidance this year is showing top line growth after pro forma numbers, if you take the different properties that had been declining over the last couple of years. And so, I think that's very important, because we're turning the corner, and we're becoming more relevant to consumers throughout the world and in particular in North America, which is our focus. We do have 15 million daters a year. I think there are things that we can do from a marketing perspective that we continue to test like retargeting is important. For us, win backs are important. We continue to focus on that. I think we have opportunities also from a marketing perspective to be more active. From a mobile perspective, we haven't focused as much on that. We've had a demographic, that's older that has stayed a bit longer on the browser, but it's high time for us to engage a lot more in that area. And then -- and this goes back to the discussion we're having just with Austin, which is we need to bring more activity to our platforms where people can do more things more informally as opposed to just to search directed behavior. And as we think about social and as we think about things like obviously live stream is one example. But as we think about these things, the hope is that people will come back more often. We'll see more interesting things to do on our platforms, and we'll meet people more informally. And that will extend the life of people that are in the platform and will also sort of make people that will otherwise leave the platform stay with us. So, I think a lot of it is about enriching our platforms with more activities so that people are excited about coming back to us and staying with us. And so, I think there's lots of value to be captured there, and we have people coming in, right? So, now that if we can create richer experiences, I think we'll have a good shot at keeping them on the platforms.

[John Lewis:]

Okay. I appreciate that. So Eric, I've looked in your background, you have a long continuous string as a public CEO of not missing guidance, which is very encouraging. So, congratulations on that. And I guess last year at this time, you thought we'd be -- I guess guidance was for two 12, two 18. You exceeded that by $15 million to $20 million. Seems like -- I appreciate your conservatism and track record. So I guess the question is, when you look out at 2021, what areas do you see where there could be potential upside? It sounds like the potential with the Parship partnership, but I guess I was more curious around anything on mobile retention increases or any other areas that you think has the potential to surprise in 2021?

[Eric Eichmann:]

Yes. I don't know which one would be a surprise, but we certainly have in the plans meaningful product improvements. So we are continuing to deploy a new aesthetics to our products. Aesthetics are important in our space, because it's how you present yourself as an individual. And if you're surrounded by something that looks 2015 and not 2021, it's not as good. So that's one component we're taking out. As I said, we're going to be testing as we do normally different sort of prices and we'll see where that takes us. And we'll also be doing things around marketing. And so, as you start testing some of these things, sometimes you find some that work very well and you're able to scale rapidly. I do think we have a well-balanced set of initiatives. And you never know what could work and what does better than what your expectations are. So, we'll see how we develop throughout the year, but we certainly are excited about what we can do with the brands that we have.

[John Lewis:]

Thank you for that. I guess if I could just follow back up. As I try to wrap my head as a perspective of what 15 million daters look like, it's the equivalent of registering the entire state of Idaho, Washington State, Oregon and Nevada every year. And so, I mean, it's a tremendous number of registrants. And literally, you're spending the same as Bumble on acquisition. And so my question really just to probe more deeply is, once you get a registrant, what can you do to monetize that lead effectively over time? I mean is this -- if you acquire -- if you registered someone in 2020 or 2019, what is the process to try to monetize the flow of registrants?

[Eric Eichmann:]

Yes. Look, I think there's retargeting opportunities that we haven't looked at or that we're sort of starting to scratch now as the surface off could bring them back and become subscribers. So, I think that's a potential area of value in bringing those back. But beyond sort of like the -- and then the other thing I would say is, and I've said this before is we're not doing as much as we should on the app side. And so, capturing those people that come through the app that might sort of -- we might have seen -- they might have clicked on an ad of ours come to the website, but then we see them again on an app and we should be able to bring them back. So I think on a marketing -- from a marketing perspective, there are opportunities like that. I do think that what's -- the biggest potential impact in terms of reducing retention and you realize also we have obviously natural churn in the sense that if people which we want to are successful in finding a partner in our platforms they are normally in serious relationships and they're bound to leave our platforms. But the most important thing I think is just to give people opportunities to meet people in different ways. So matchmaking algorithms becoming better and matching the right people early is important, but also providing them activities that they can come on to the platforms to meet people more informally which goes to the social dating. And so, I think if we're able to do that we could affect also retention once people sort of show off at our door if you will. It's just -- it looks like a better party when you have lots of things going on when you show up at somebody's house as opposed to a search and match functionality only. So, I think that's part of what we want to do as we do. And as we have these things too like live streaming the ability for us to tell the story from a marketing perspective becomes broader than just the single story.

[John Lewis:]

I really appreciate that. I'll just leave with this last comment which is I'm really -- well I'm really enthusiastic and happy to hear that you're back to being a domestic filer, you said 6 -- I think six sell-side conferences. And I think when I look at the -- as I said earlier, the huge gap between your market prices to what even kind of bare minimum I look at it you got 1/3 evaluation of Match or Bumble a 20% discount to Parship's 2020 nuclear winter valuation or just an S&P Market multiple, you'd be at about $24 a share. So I -- there's a lot of upside for just getting a market multiple and I think you guys could overshoot if you have some success in these initiatives. So thanks again.

[Eric Eichmann:]

Appreciate it. Thank you John.

[John Lewis:]

Thank you.

[Operator:]

Our next question comes from Adam Waldo with Lismore Partners LLC.

[Adam Waldo:]

Good day. Thank you very much for taking my question. My questions are around balance sheet issues in the context of improving the financial flexibility of the company and the runway for accelerated growth and accelerated reinvestment. So we've had -- since we did this deal and closed in July of 2019, we've obviously had this high-cost debt on our balance sheet. And we're now down to the point where we have kind of run rate net debt-to-EBITDA -- adjusted EBITDA I should say of around 2.4, 2.5x. Our free cash flow multiple is about 4x -- net debt is about 4x free cash flow that you report for 2020 and interest rates are at rock bottom levels around the world although they backed up a little bit recently, but what are we doing to try to refinance that debt where we're paying double-digit interest rates? And how quickly do we think we'll be able to refinance that debt? And then I have a couple of follow-ups.

[Eric Eichmann:]

Yes. Adam thank you very much for those questions. So obviously this is an important part of us becoming more flexible and having a stronger balance sheet. So we couldn't agree more. We'd love to have more flexible covenants and lower cost or debt. We did sort of run a process last year and we ended up sort of having a great agreement with our lenders. I do think that as a company as we start showing progress from an income state perspective the ability for us to rethink our debt will be there. It's not something that we're sort of focused on immediately, but I do think that once -- and also being a domestic filer I think will help eliminate a little bit of uncertainties and might open up the ability for certain people to make an investment from that perspective. And so, I think we're very open to that and we will certainly sort of consider it when the opportunity presents itself. So I -- this is of course top of mind but it's not sort of the core focus of the company at this point.

[Adam Waldo:]

Well okay. But we're paying $10 million or $11 million a year of cash interest. And so have we thought about going to the capital markets to issue term debt and going out to the bank market and then -- okay. And what is our current thinking there?

[Eric Eichmann:]

Yes. So look again, I'd be the first one to look at all these options. And if they look realistic and when they look realistic and I'll just go back to where we were as a company. We're not a domestic filer or top-line was not growing. And so I think all of those sort of limit our ability to do what we wanted to do. And as we move forward we'll certainly be looking at all those options.

[Adam Waldo:]

No fair enough. Now that we're a domestic filer we feel that we can pursue those activities more...

[Eric Eichmann:]

I think we need to -- yes we will explore those things in time but I thought there was a number of things. And number one is always sort of taking care of the health of the business. Once you have a healthy business I think people are much more receptive to be lenders than if you don't have enough proof points to show that your business is healthy. So I think we're moving in the right direction in -- when the opportunity presents itself, I think we'll be in a position to do that. I don't like high interest rates more than you do believe me and I certainly don't like constraints in terms of covenants to allow us to invest to drive shareholder value. So, we couldn't be more aligned from that perspective yes.

[Adam Waldo:]

Fair enough. I appreciate it. Now in terms of your guidance then for 2021, you've given adjusted EBITDA guidance of $33 million to $36 million. If you're sort of cash conversion would look pretty similar to what it was last year. Should we be expecting kind of high teens free cash flow this year? And then on the intangible asset side obviously a sizable write-down here at the end of last year. I presume most of that's related to Zoosk. And do we think we're reaching a point where we're likely to have considerably smaller if any intangible asset write-downs going forward now that, we're giving guidance to grow the topline again?

[Eric Eichmann:]

Yes. So, it's hard to know what impairment or what valuations will look like in the future, but I think we can sort of take a hard look at this now. And so hopefully we're making some adjustments as you've seen in the balance sheet. So I would expect that the adjustments if there are any going forward would be less significant. But of course, it's hard to tell. I don't have a crystal ball, but yes. And then, on your question about free cash flow, I don't know. Bert, you want to address that one?

[Bert Althaus:]

Sure. Yes. And so Adam, I think the way to look at it is, you look at it as completely right. So, to just derive it from the EBITDA, I think it totally makes sense to assume a similar result this year on the operating cash flow. So there is not a big change in respect to capitalization.

[Adam Waldo:]

Okay. Terrific. Thank you. Well, congratulations on becoming a domestic filer. We look forward to hearing from you quarterly and good luck getting out and telling your story this year as the pandemic recedes.

[Bert Althaus:]

Appreciate. Thank you.

[Operator:]

Thank you. Our next question comes from Patrick Retzer with Retzer Capital Management. Please proceed with your question.

[Patrick Retzer:]

Good afternoon gentlemen.

[Eric Eichmann:]

Good afternoon, Pat.

[Patrick Retzer:]

Thanks and I hope you are the same. I wanted to congratulate you on several things. First of all, the transition of becoming a domestic filer, I think that's a big deal. It looks like you're engineering a nice turnaround. That's wonderful. I think the robust IR program, you talked about is appropriate. I think this company especially in its reinvigorated form is virtually unknown to most of the US investment community. And finally, I want to congratulate you on the positive guidance. It's been a while since we've seen topline growth, so great work there. I had questions regarding the build-out of mobile and also of monetizing these 15 million subscribers you have every year, but I think they've mostly been addressed already. But if there's anything you'd care to add on those topics, I'd love to hear them.

[Eric Eichmann:]

No. I think -- look Pat, thank you very much for your positive feedback. We're as excited as you are about a lot of these things that we talked about domestic s, the positive top line guidance, et cetera. Look, there's no question that there's value in those 15 million registrations that we get. We try hard to convert them. We have to try new things and some of the new things are marketing tactics like retargeting, some of the new things or product improvements and more excitement on our platforms. And we'll see what works, but we certainly are very aligned in terms of making -- we're taking full advantage of that stream of users coming our way.

[Patrick Retzer:]

Okay. Well, keep up the good work and make your Investor Relations guy work harder. Thanks.

[Eric Eichmann:]

Okay. You heard that, Chris? A - Chris Camarra I'll do about that.

[Operator:]

Thank you. There are no further questions at this time. This concludes today's conference. We would like to thank everyone on behalf of Spark Networks for attending. And if you have any follow-up questions, please feel free to reach out to Chris Camarra, the Vice President of Investor Relations. Thank you for your participation and have a wonderful evening.

[Eric Eichmann:]

Thank you.

[Bert Althaus:]

Thank you.