Nielsen Holdings plc
Q2 2019 Earnings Call Transcript

Published: 31 Jul 2019

[Operator:]

Good morning. My name is Carol, and I will be your operator today. At this time, I would like to welcome everyone to the Q2 2019 Nielsen Holdings Earnings Conference Call. [Operator Instructions].At this time, I would like to turn the call over to Sara Gubins, Senior Vice President, Investor Relations.

[Sara Gubins:]

Thanks, Carol, and good morning, everyone. Thank you for joining us to discuss Nielsen's second quarter financial performance. I'm here with our CEO, David Kenny and our CFO, Dave Anderson. A slide presentation that we'll use on this call is available under the Events section of our Investor Relations website.Before we begin, I'd like to remind all of you that our remarks and responses to your questions today may contain forward-looking statements, including those about Nielsen's outlook and prospects that are based on Nielsen's current expectations. Our actual results in future periods may differ materially from those currently expected because of a number of risks and uncertainties, including those identified in the Risk Factors section of our most recent annual report on Form 10-K and in subsequent reports filed with the SEC, which are available on our website. We assume no obligation to update any forward-looking statements, except as required by law.On today's call, we will also refer to certain non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most comparable GAAP measures are available in the earnings press release, which is available at the Investor Relations section of our website at Nielsen.com. [Operator Instructions].And now to start the call, I'd like to turn it over to our CEO, David Kenny.

[David Kenny:]

Thank you, Sara. Thanks everyone for joining us. Let me tell with some brief high-level comments. I’ll then let Dave review the second quarter results, and provide some color on our expectations for the third quarter and the remainder of the year. And then I'll come back for a brief update on our strategy and progress, in both media and connect and then we’ll take your questions.Let me start with the strategic review. We expect to conclude the review by the time we report our third quarter and we look forward to sharing the outcome with you then if not earlier. The board and management are working as quickly as we can to conclude.In the meantime in parallel, we continue to focus on driving improved results, and we're going to use the time today to update you on our progress in driving those results. So speaking of results, our second quarter results again, came in better than plan, which reflects improved operating discipline and Nielsen's ability to execute.We had positive constant currency revenue growth in both media and connect. With a solid first half behind us, we are on track to deliver our 2019 revenue, adjusted EBITDA, and free cash flow guidance. We are increasing our adjusted EPS guidance range and Dave will run you through these details.At a higher level, let me emphasize that we have two strong franchises that are essential to the media, retail and FMCG economies. Each of these businesses has greater potential and the actions that we're taking and our investments in growth position as well to achieve that potential.We have made some important moves on our transformation to being a more product-driven technology company. First, we moved our core national television audience measurement processing to a modern cloud based infrastructure working alongside Amazon Web Services. The ability to now more easily scale big data sets will drive flexibility and velocity for our product development, which enables us to deliver more and enhanced value to our clients.Secondly, on the Nielsen connect side, we are rolling out the Nielsen connect platform, which has transformed -- transformative for our clients. We recently went live with a very large client as their system of record and hundreds of clients are using key components of the platform. Our clients are excited about this, and our relationship with Microsoft Azure as our cloud partner is helping to be more essential to our clients and connect. And third, we continued to solidify around cross-functional leadership team, that focus on product components creating the most value for our clients as we continue our transformation into a product centric company.Let me now turn the call over to Dave to review the quarter, and then I'll come back with an update on each of our segments.

[David Anderson:]

Thanks, David. Let me start with the slide number five. I'm just take you through some of the highlights and you know what I think are some of the key takeaways. We're obviously pleased with the results for the second quarter, which were slightly ahead of expectations. It's really a tribute to the organization. If you think about the dynamic nature of the environment that we're operating and the fact that we're able to deliver these numbers we feel very very proud of.Revenue grew 1.2% on a constant currency basis, reflecting growth in both Media and Connect in the quarter. Year-over-year margin rate improvement reflects better revenue, but also significantly the results of our productivity programs that are clearly working.Adjusted EPS was $0.53 in the quarter. It was driven in part by EBITDA performance, but also helped by a lower effective tax rate in the quarter. I'm going to talk about that a little bit later when I talk about guidance for the quarter, coming as well as for the full year.Free cash flow of $118 million came in within our expected range. So as a result, we're reiterating our revenue, adjusted EBITDA, free cash flow guidance for 2019. And as David said, we're raising our adjusted EPS guidance, and again I'll provide some more insights on that in a few minutes.If you go to slide number six, let's take a look at the second quarter highlights. Revenue of 1.2% growth for the quarter on constant currency, it compares to our expectation of flat to up slightly, so we're really pleased obviously with that performance. We saw improved trends in both Media and Connect in the second quarter, both growing year-over-year on a constant currency basis.Revenue increase 0.7% on an organic constant currency basis, and if you exclude the impact of onetime items in the year ago period organic revenue grew 1.7%.For the second quarter, adjusted EBITDA was $470 million, that’s up 2% constant currency and adjusted EBITDA margins were 28.9% up 20 basis points on a constant currency basis. And again, this compares to our expectation of roughly flat margins in the second quarter, so obviously very very pleased with that performance.Now margins benefited from positive performance and productivity, partially offset by investments that we've made in our people and in our businesses, and we’ve referenced both of those as you recall in our original guide for the year.This is consistent with our first quarter performance and we believe will translate into full year benefit. And again, I'll talk more about that when we discuss full year guidance.The second quarter tax rate of 15% was well below the prior 33% to 35% forecast for the full year and it relates specifically to several discrete items in the quarter, regarding both tax contingencies as well as settlement of a major tax audit. And if you exclude these items, our tax rate was 34% in the second quarter.Adjusted EPF $0.53 compares to $0.47 in the second quarter of 2018, primarily again reflecting tax favorability offset by higher depreciation and amortization year-over-year.Cash flow of $118 million compared to $124 million last year, largely in line with our expectations. In the quarter, we had lower restructuring, so we had some offset from working capital timing, primarily the timing of receipts versus the timing of payments in the quarter.So overall the second quarter results reflect as David said, we think, very very good execution by the organization. And again, we want to thank our associates around the world for their focus, the hard work and their dedication during this period.So now let's start with Media on slide number seven, just a few highlights of each of the two segments. Revenue for Media for the second quarter was $856 million. It was up 2% year-over-year on a constant currency basis. If you adjust for M&A and the impact of TV brand effect, Media revenue would have been up 2.2% year-over-year.Audience measurement was up 4.2% constant currency. We continue to see strength in National TV, double digit growth in digital. But as expected, local was down year-over-year and audio was down slightly year-over-year.Plan optimized was down 3.3% constant currency. If you adjust for M&A and other items, it was down 2.6% compared to the second quarter last year. Significantly, the telecom business has been under pressure, and we also saw some pressure and grace note to a tough comparison in the second quarter.Media’s adjusted EBITDA was $371 million, up 2.2% constant currency and importantly, margins at 43.3% for Media were up 7 basis points constant currency. So productivity more than offset some the incremental investments that we're making in this segment.Going to slide eight, let’s just briefly highlight connect performance. We saw strength in measure offset by some continued weakness in predict and activate. The connect revenue of $772 million was up 0.4% constant currency. The impact of M&A in the quarter for connect was minimal for onetime items from a year ago, were a drag on revenue of 90 basis points.Revenue in measure was $546 million, up 1.7% constant currency. It reflects strong performance in our retail measurement services, and also some improved trends that we saw in the quarter in China. And notably, our omni channel and retailer initiatives are performing well.Revenue in predict activate was $226 million; it was down 2.6 constant currency, but less of a climb that we saw in the first quarter. While we continue to see pressure in the short cycle consumer insights and innovation business, the declines have lessened significantly and we expect that level of improved performance in the second half of the year.Developed markets revenue was down 0.4% in Connect constant currency. We continue to see declines in the U.S. and stable trends in Western Europe. Emerging markets were up 2% in the second quarter. China improved as I mentioned in the second quarter against a relatively easy comp last year. Now we expect China to continue to improve during the year helped by expanded coverage.Connect adjusted EBITDA was $109 million, 0.9% year-over-year. Adjusted EBITDA margins were 14.1% up 8 basis points constant currency driven again by productivity initiatives.So let's go now to slide nine talk about the outlook for 2019. We're maintaining our guidance as we said for revenue, adjusted EBITDA, free cash flow and we're increasing our adjusted EPS guidance.This guidance includes, total company constant currency revenue flat to up 1.5%, Media and Connect are consistent with our previous guidance. I’m going to spend just a little bit more time on that in just a minute.We continue to see expected adjusted EBITDA margins in the 28% to 29%, but based on the first half performance in our outlook for the second half, we expect to be at or above the midpoint of that range for the full year, so adjusted EBITDA margin will be driven by significant productivity, partly again offset by reinvestments that we're making in the businesses.Adjusted earnings per share are expected to be in the range of $1.70 to $1.80. This compares to our previous range you recall of $1.63 to $1.77. So we've lowered our 2019 GAAP tax guidance to 28%-29% in light of the first half actuals, and also our expectation for second half GAAP tax rate in the range of 32% to 34%.We've also lowered our forecast for interest expense given the current interest rate environment, but we've also increased our forecast for depreciation and amortization expense. This relates to timing of internally developed software initiatives and details around these changes are in the appendix of our slides.Lastly, we're going to continue to expect free cash flow to be in the range of $525 million to $575 million and the midpoint to be roughly flat with to 2018. And as we've discussed the key drivers are going include for 2019 lower incentive comp, pay outs, lower retail payments offset in part by higher cash, net cash interest, and also cash taxes.Turning now to Slide 10, the segment outlook for Media, we continue to forecast 2% to 3% constant currency revenue growth. We expect Audience Measurement to be the high end of the 2% to 3% revenue growth range, while plan optimize, we now forecast to be at the low end of the 1% to 2% range.Telecom is a key pressure driver on the plan optimized outlook. In Connect, we continue to forecast revenue to be minus 2% to flat with measure coming in towards the high end of the minus one to plus one range, and predict activate in the previously provided minus 4% to minus 2% range.Finally let's turn to Slide 11, let me talk about what we anticipate for the third quarter. Just give you a little bit of framework, in terms of how to think about what we're seeing and what we expect. We expect revenue in the third quarter to be up slightly year-over-year in constant currency. It includes the year-over-year growth rate accelerating the third quarter for Media and assumes a slight decline for Connect.For the third quarter, we expect margins to be flat to down slightly year-over-year. We're seeing the benefit of productivity, which provides support for investment and growth initiatives such as digital in media, and the continued deployment of the Connect platform in Connect.I'd also note that we continue to anticipate the conclusion of further tax audit in various countries in the second half. If this occurs similar to the second quarter, it could have a meaningful impact and translate to an effective book tax rate below the 32% to 34% guide that I reference for ETR for the second half of 2019.And finally, we expect third quarter free cash flow to be flat to up slightly on a year-over-year basis. And as we discussed with you, we've got a lot of focus on cash in the organization.So in summary, we're obviously very pleased with the second quarter and first half results. We're confident in our plan and the full year outlook for the -- hopefully come across with a commitment to deliver on all fronts. We look forward to updating you on our continued progress.And with that, I'd like to turn it back over to David for his further comments.

[David Kenny:]

Thanks, Dave. I really appreciate everything. Let me say as I said before, that we have two strong franchises that are essential to the media and consumer packaged goods flash retail economy. We are taking actions to position each of our businesses for improved performance as we move ahead.So let me focus on each segment. I'll start with Nielsen Global Media. Our metrics and data are essential to creating trust in the media ecosystem, providing media owners and advertisers with a clear picture of exactly who consume content and advertising, how many times, whether they are engaged and how this translates into growth for their business.Since joining Nielsen, I have spent a lot of my time with CEOs and media owners, digital first company, advertisers and agencies around the world. What I hear is that media is more fragmented than ever before and the need for a single source of truth is more critical today than ever.So I have increased conviction that the media industry needs one media truth across the entire value chain and that only Nielsen can do that. Looking at the business highlights, let's start with Audience Measurement. We thought swings in both linear TV and digital video measurement. Digital was driven by growth with our advertiser and agency clients, reflecting the critical nature of independent third party measurement and the further progress towards currency status across all platforms.Demand is growing for audience based buying, which is selling high value target audiences in linear advertising, as advertisers seek to maximize their return on investment. Nielsen is a leader in this date. Our advanced audience solution provides much needed industry consistency, and transparency on advanced TV segments.As one example we recently signed Horizon Media as the first agent and client for this solution, which unifies the planning, activation and measurement of audiences beyond age and gender. We're also focused on bringing the same level of transparency to addressable television, which uses dynamic ad in view to target ads 1

[Sara Gubins:]

Thanks, David. Carol, can we open up the lines for questions, please.

[Operator:]

Certainly.[Operator Instructions] Our first question this morning comes from Toni Kaplan from Morgan Stanley. Please go ahead.

[Toni Kaplan:]

Thank you. Good morning. What's led you to…

[David Kenny:]

Good morning, Toni.

[Toni Kaplan:]

Thank you. What's led to the increased confidence that you'll complete the review by the third quarter earnings? I know you could set sort of whatever deadline you want, but I guess what's made you determine that it's imminent and relatedly today you seem to have talked about the two segments as two businesses a little bit more separately than you have in the past.So maybe I'm reading too much into it, but are you suggesting that you're finding in the review that the best way to unlock value is for the businesses to be separate? Thank you.

[David Kenny:]

Yes, listen, I’m not going to comment on that hypothetical split. And as I said on the call today, we do expect the review to be concluded by the time we report in the third quarter. There's really nothing more to say, the confidence is just because we've made good progress.

[Operator:]

Our next question comes from Andrew Steinerman from JPMorgan. Please go ahead.

[Unidentified Analyst:]

Hi, good morning. This is Jude [ph] on for Andrew.

[David Kenny:]

Good morning.

[David Anderson:]

Good morning.

[Unidentified Analyst:]

We appreciate the additional color in terms of the timing for the strategic view. I wanted to ask a business strategy question, that perhaps you've been able to reflect on through the review. We were wondering what you've learned about the business at this juncture through the review in particular, what areas of the company have been most intriguing to other firms even you’ve been in talks about what areas have given them room for pause, and maybe how have these perspectives helped shape your business strategy going forward? Thanks.

[David Kenny:]

Yes, I think the review's been helpful and so has been all the client input. I think it's given us a lot of confidence in the value of one media truth and the need to connect those dots and our role in the overall industry. And I think, certainly anybody who's looked into business, sees just how essential we are, which has given us great confidence in the franchise. And I would say on the connect side; I think there's also been a view that there are changes. E-commerce is growing and there is a need for a more complex data set, which Nelson has.And I also believe some of our modernization has been important to understand how we can provide that productively and how we can connect with the other systems that retailers are using. So I’d say the market demand has been very positive, and I think anybody who invests in the company including all of you should understand just how essential Nielsen is. I’d say as we dig deeper I think we've also learned a lot about our operations and how to improve our operations. And I think having a deep dive has certainly made us a stronger company operationally and organized more of our data in a consistent easy loose manner by our operators.

[Operator:]

Our next question comes from George Tong from Goldman Sachs. Please go ahead.

[Unidentified Analyst:]

Hi, you have Ryan [ph] on for George. I just had a question around your margin target. I know back at your Investor Day in 2017, you'd a longer term target of approximately 35% driven by some of your cost savings and productivity improvements, but obviously it's been you know a little bit lower than that in the recent quarter, so do you think that 35% is still an appropriate target, or has that number change as you're looking to reinvest to support growth?

[David Kenny:]

Yes we really haven't established or reestablished long term targets for the company and certainly nothing that we as you know we've communicated externally. The focus is, as David said, it's really on execution right now with a lot of priorities that are translating to the results that you see and importantly not only slightly ahead of our expectation, ahead of prior year, in terms of EBITDA margin, while supporting reinvestment in the business.But as I said in our guide for the full year outlook, we expect now to be at the mid to the upper end of the guidance range, that we had previously communicated. The 28% -- to 29% for 2019. So yes, we're really -- we're really focused on that and obviously very very committed to delivering around that. So that's that's really I think the sum and substance of where we are.

[Operator:]

Our next question comes from Manav Patnaik from Barclays. Please go ahead.

[Manav Patnaik:]

Can you hear me?

[David Kenny:]

Yes, we can.

[Unidentified Analyst:]

Hey, thanks for taking the questions. This is Ryan on for Manav. It's just a question on you know obviously we've seen a lot of issues around kind of privacy and some of the publishers themselves with how they treat data. Have you seen any opportunity in the past year or so just regarding kind of your third party nature, and any opportunities or just given your expertise especially on the privacy side?

[David Kenny:]

Yes. Certainly I would say on the Media side. As everybody's been dealing with privacy, it has I think caused all the players to have value in independent third party measure one that can be done without Pii, and that can be done with things like panels, which are very privacy-friendly and reluctant. And I also think as everybody needs to transact with each other having a single truth so that as a currency has become more important in more aspects of media. So certainly, I think privacy in a broader kind of legislative environment around that certainly does create more need for Nielsen and more need for independent third party validation.I would say on the connect side, we're also seeing that it’s -- as folks get more personalized in their advertising, they want to have a better truth set of what's going on in market share, our investments in coverage, our investments in e-commerce, our investments to look at this globally has certainly been more important to advertisers as they become more data driven, and to retailers as they become more data driven on the connect side.

[Operator:]

Our next question comes from Dan Salmon from BMO Capital Markets. Please go ahead.

[Daniel Salmon:]

Hi, good morning everyone. Thanks for taking the question. Dave, I wanted to ask a little bit about Amazon. We know they are an important client already as they become a bigger player in Media and Advertising but their core business is accounting for an increasing share the type of commerce that’s important to connect, however, they are not still not a partner in new methodology in quite the same way say Walmart is. So I wanted to ask about your broader relationship with Amazon both as a customer and a partner how that’s evolving and then of course the news in the quarter it was the move to AWS and would just love to hear more detail on that for your business but also how that may affect the relationship or your trajectory with – trajectory of your relationship with Amazon. Thank you.

[David Kenny:]

Well listen, I you know -- I think Amazon needs to speak for itself. We don't generally talk about specific partners in great detail. We let them do that. So what I would say is there's a very good relationship across Amazon. I think as they as you say is there in categories that we cover on the connect side there is a good relationship around the world on that, as they make investments like Whole Foods that also creates an opportunity, so we work well. I think, AWS is the media platform. It's two sides, the Amazon, I would -- I would say there's it's not you know totally link between the two sides, but I would say they are a good partner and we're working increasingly, productively with them.

[Operator:]

Our next question comes from Tim Noland from Macquarie. Please go ahead.

[Timothy Noland:]

Good morning. Thanks. I wanted to ask on the Media side, it seems you're getting a bit more into some actual media buying. I think the acquisition of Sorenson perhaps gets you a bit more into that space. Your business traditionally has been third party independent measurement, but now correct me if I'm wrong, but you are getting a bit more into let’s called the activation of that. I just wonder, do I have that right. Is this a strategic shift? Is this something that really enhances the business and does it change your relationships with any of your traditional customers at all?

[David Kenny:]

Yes, I think you might be extending too far. We clearly believe that one media truth required independent third party measurement, and for us to not be a principal actor in buying. Sorensen is a set of technologies which enable, addressable TV buying and selling. And so we'll be enabling that, and licensing that, but we're not going to have a principal position. I think the market's counting on us to be the scorekeeper and referee of media, not playing on the field.

[Operator:]

Our next question comes from Todd Juenger from Sanford Bernstein. Please go ahead.

[Todd Juenger:]

Oh hi, good morning. Thanks for taking the question. Can I, maybe Dave explore a little bit with you on the tax deck side stepping back a little bit. It seems to me that to achieve your vision of A, I think you say product-driven technology company that the technical underpinnings are super important to achieve that. So I'd love to hear your thoughts on the technology you inherited and how that has been designed and we saw obviously the move to AWS which you were just talking about, and how that compares to if you could build it from scratch yourself, what it would look like to be ideal for what you want to do, which brings me to the heart of the question, which is, what will it cost you overtime to get from where you are today to where you would like to or need to be and how will you evaluate the ROI on that? We'd love your thoughts, thanks a lot.

[David Kenny:]

Yes. So listen so if you could start from today, you know technology has evolved a great deal and you start with a collection of collection of well-built micro services, with interchangeable components living on public cloud if it's scaled to the Earth, to the moon, at no incremental cost. But we don't have a chance of starting from today. We have a legacy system like all legacy companies. And I think conversely, our legacy is a great strength, because our years of history our knowledge of data are establishing the currency are also important. So we have to manage on migration in that direction. And it's a migration that other legacy companies need to do and quite honestly, you know to be talking about public cloud in 2019 it's a bit late, but we're getting there. And what I would say, I'm encouraged about is the company really rallied in the last seven months to take a bunch of very good plans that existed and move and move quickly, and we've gotten partners to step up to help us to do that.So we are moving to exactly that kind of system, which is a single architecture across our media platforms and quite honestly there's an architecture across connect to single data like services that can be reused, which allow us to scale at a much faster rate. So it can get there. I think, either you know there's plenty of history of companies that have migrated a legacy over, it just takes conviction and courage and quite honestly, a fair amount of top down management. I am very impressed by the tech team at Nielsen. I think that some of these investments were smartly made before I got here, and I really enjoyed rolling up my sleeves with them and engaging on how we get there. And I think the whole companies rallied to do that. So, I think, I think we're in very good shape. We're actually a little ahead of where I would have hoped to have been six months into my tenure, but we have ways to go.In terms of cost, I think the good news about this migration is the technology has evolved far enough that you can do it without sort of some big increase in expense and then you push it out the other end. We don't have to redo everything. We're migrating things over time. I highlighted the movement of the core ratings, because that's a big module and it shows we can move. We can move the biggest and hardest things and make them work well in a modern architecture and still hit our numbers.So this is just being baked into the way we operate the business. We don't intend to come tell you we need a big restructuring or something to get there. We're just taking this into the way we design our products.

[David Anderson:]

And David, just maybe just add quickly to that. It's a really good point, because it's consistent I think Todd with what we've discussed today, which is you know productivity is so key, generating gross productivity it allows us to reinvest in terms of priority for growth initiatives as well as David said in terms of the technology or call it the technology transformation.So that's that's the roadmap that we've developed a roadmap to the creative, we want to manage that intelligently and still deliver the kind of you know the kind of earnings at or above consistent levels. And that's, that's what we're focused on doing.

[David Kenny:]

Yes. The last thing I'd say is, the thing I'm celebrating internally now would point out being from the year ago. We're celebrating when we sunset technology and turned it off. That's the way that you migrate without having cost. The challenge is to try to maintain the old system and the new get duplication. So we are very focused and celebrating the retirement of old technology and that's actually how I think you'll see us become modern much faster and while still hitting the margin targets.

[Operator:]

Our next question comes from Ashish Sabadra from Deutsche Bank. Please go ahead.

[Ashish Sabadra:]

Hi, thanks for taking my question. So we saw Connect positively turned inflict – the connect growth inflicted positive in the quarter which is good. When you talked about slight decline in Connect in the third quarter, just wanted to better understand is that just conservatism just given that you continue to see improvement in China? Anything in particular, which will cause the growth to decline again in the third quarter? Thanks.

[David Kenny:]

Yes. I don't think there's really anything that stands out there. I think you know overall this we're very very pleased with how the business has performed to demonstrate growth in the second quarter. We're really talking about, I think just a little bit of variability you know on a quarter-over-quarter basis, something that has to do with a tougher comp in the third quarter of last year. So I wouldn't, I wouldn't read too much into that just to make sure that you guys have an expectation in terms of how the compare is going to be third quarter revenue for Connect compared to prior year.But that's nothing that, I wouldn't point out any single geography or any particular item related to that guide.

[Operator:]

Our next question comes from Surinder Thind from Jefferies. Please go ahead.

[Surinder Thind:]

Good morning, guys. When I kind of look at the midpoint of your guidance and I look across both segments, both media and connect, it seems like you're seeing stronger results in the measurement, which is the hard data, and arguably the more discretionary offerings are on planning or maybe seeing at the low end of that guidance.Any color you can provide here is there just a bit of a wait and see approach that you see perhaps from clients or any color would be helpful?

[David Kenny:]

Yes. So first of all, in the in the plan optimized side of media predict activate. There were a series of acquisitions made over time. I have not seen all the work done on integrating those into a single platform. That is what we're in the middle of. And that's a place for – going to ask you we’re a little behind where I would have hoped to be, but we're on it and we're making good progress, because you have to have the platform built in order to sell them. So I would say we've got some product execution to integrate that.And then I would say, on the go-to-market you know it's a different muscle, sometimes different buyer. So I would say, it's largely execution on both product and go-to-market. We are all over that, to make sure that we realize the potential there. These are really important segments for our future, and I think delivering on our purpose about one media proved to be delivering on our purpose around really helping to create markets in the consumer space. We have to do both sides, and we have the tools, and we have the pieces. We just need to put them together into one solution, which is why that tech modernization is actually very tied to the performance in those segments.

[Operator:]

Our next question comes from Richard Kramer from Arete Research. Please go ahead.

[RichardKramer:]

Thanks very much. Just a quick one. What more can you do to get more access to in app inventory and to understand better the audience that it's within apps. It seems to be an area where you will see increasing amounts of time and audience shift. And I'm wondering what more tech prior to acquisitions or technology you could do to get access to that audience to rate it properly? Thank you.

[David Kenny:]

Yes. It's a great question. Thank you. Technically, you know we certainly are focused with panels on things like streaming leaders so that we understand what stream. So when they uplift the video and the video stream, we've got ways of knowing that certainly some of the technologies like ACR help us as well. So we are -- we're certainly I think building the core technology around that to make sure that whether it's in the home or out of home that we're getting that metrics. And I think they continue to get stronger, which is why you know earlier I mentioned companies who were mentioning it on their earnings report. Those were all videos and apps that they were quoting. So I think we are certainly providing the best data on that and we continue to work to make that better.

[Operator:]

I'll now turn the call back to Mr. Kenney for closing remarks.

[David Kenny:]

Hey, thank you. And thank you for the great questions, I appreciate it. To sum up, we are working hard on the strategic review, which we expect to conclude by the time we report our third quarter. If not before. And I hope you'll understand that we don't have more to say about that today. But I would also say that as I have spoken to our clients, both large and small, it's crystal clear that reliable data sets, key sources of truth are increasingly essential to great decision making.So not just key to driving growth for our clients, but they also help power, a healthy media and consumer market around the world. In addition, we're working hard to align around the key initiatives that will enable our clients to make great decisions for their businesses, long into the future. I look forward to speaking to all of you soon about the outcome of our strategic review. And meanwhile thank you for joining us and let us get back to execution. Thank you.

[Operator:]

This concludes today's conference. You may now disconnect.