Shopify Inc.
Q2 2020 Earnings Call Transcript

Published: 29 Jul 2020

[Operator:]

Thank you for standing by. This is the conference operator. Welcome to the Shopify Second Quarter 2020 Financial Results Conference Call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions.

[Katie Keita:]

Thank you, operator, and good morning, everyone. We are joined this morning by Tobi Lütke, Shopify's CEO; Harley Finkelstein, our Chief Operating Officer; and Amy Shapero, our CFO. Each of us is dialing in from our homes. After some brief prepared remarks by Harley and Amy, we will open it up for your questions. We hope you enjoyed the on-hold music created by Shopify's own internal talent, now for something slightly more austere by our legal department titled Risky Business. We will make forward-looking statements on our call today that are based on assumptions and therefore, subject to risks and uncertainties that could cause actual results to differ materially from those projected. We undertake no obligation to update these statements, except as required by law. You can read about these risks and uncertainties in our press release this morning, as well as in our filings with U.S. and Canadian regulators. Note that the adjusted financial measures we speak to today are non-GAAP financial measures, which are not a substitute for GAAP financial measures. Reconciliations between the two can be found in our earnings press release. And finally, we report in U.S. dollars, so all amounts discussed today are in U.S. dollars unless otherwise indicated. With that, I turn the call over to Harley.

[Harley Finkelstein:]

Good morning, everyone, and thank you for joining us today. We hope that you're all keeping safe and healthy. Over the past few months, we've seen the COVID-19 pandemic fundamentally shift the way businesses and consumers interact. It has catalyzed e-commerce, introducing major changes in buyer behavior and pulling forward what retail would look like in 2030 into 2020. Many merchants were caught off guard, and we knew that Shopify needed to act fast to help them survive. So from late March through the second quarter, we dialed up our urgency to enable independent businesses to adapt and compete in this new reality. This urgency helped more merchants not just survive, but thrive in a period of major upheaval. I cannot recall a time in our history when we have shipped so many features in such a short period of time, helping so many merchants recover and many others reach new levels of success. As a result, Q2 GMV growth accelerated to its highest level since before our 2015 IPO, driving Shopify's cumulative GMV to over $200 billion. Stores selling on Shopify sold 1.5 times what they did in Q4 of last year, the seasonally strongest quarter of the year, and that number of stores is growing all the time. This tells me that we're on the right track and made the right decisions early in the pandemic. The success our merchants are seeing motivates us to push even harder.

[Amy Shapero:]

Thanks, Harley. We're focused on improving the commerce experience for everyone and that mission starts helping our merchants. We are on the side of entrepreneurs, whether they are just starting out or are large and established. What's important to us is building the best commerce operating system that will help them succeed in any retail environment, especially the one presented in today's tough circumstances. And when merchants succeed, Shopify succeeds, as evidenced by our merchant sales and our results in Q2. Revenue almost doubled in our second quarter to $714.3 million, up 97% over the same period last year, largely driven by our acceleration in success-based Merchant Solutions revenue, and to a lesser extent by Subscription Solutions revenue.

[Katie Keita:]

Thanks, Amy. So with that, I will hand it back to Ariel, who will begin pooling for questions.

[Operator:]

Our first question comes from Thomas Forte of D.A. Davidson. Please go ahead.

[Thomas Forte:]

Great. Thanks for taking my question. Toby, Harley, Amy and Katie, I hope you are all well. So I have a question for Toby. The CEOs of Amazon, Apple, Facebook and Google are expected to testify today before a house judiciary committee examining antitrust concerns. Those companies are your strategic partners and also your competitors. For example, Amazon called out Shopify as a competitor in its pre-released opening remarks. Toby, I wanted you to comment, I was curious on your input on the implications to Shopify.

[Tobias Lütke:]

Yes. Thanks, Tom. Yes, I think -- I mean, look, we are really focused here on our mission, which is to make commerce better for everyone. The -- our core business doesn't directly compete with any one of them, and we are partnered with all of them. And so I think -- I don't think we have any particular insights beyond just fellow travelers in a world of technology. And so that will be an interesting and we'll see how it goes.

[Operator:]

Our next question comes from Brad Zelnick of Crédit Suisse. Our next question comes from Ken Wong of Guggenheim Securities.

[Ken Wong:]

Great. In your prepared remarks, you guys mentioned seeing GMV decelerate in June and July. And given the magnitude of how you guys outperformed this quarter, can you give us a rough sense of what that step down in June and July look like so we can flow some of that through our models with -- since there's no guidance?

[Amy Shapero:]

Yeah. We're not going to provide guidance on the degree of deceleration. We're not giving guidance for the third quarter or the full year because of the uncertainties related to COVID and the macro environment. One month in our third quarter may not be representative of the full quarter. So for that reason, we're not providing guidance.

[Katie Keita:]

Great, thank you, Ken. Next question please.

[Operator:]

Our next question comes from Matt Pfau of William Blair. Please go ahead.

[Matt Pfau:]

Hey, guys. Thanks for taking my question. So you've made several recent announcements that you discussed about increasing your merchant's ability to sell over multiple channels? And specifically, I'm thinking about the Walmart and Facebook announcement. So clearly, these are beneficial for your customers. But maybe you could just dig in a little bit more on the benefit here to Shopify. Is it just sort of further differentiating the Shopify platform, or are you able to monetize the transactions that are processed over these other channels?

[Harley Finkelstein:]

Thanks for the question, Matt. It's Harley here. So look, in terms of our channel strategy, which we've been working on now for years, the idea is we think the future of commerce and retail is going to be everywhere. And Shopify plays a more central role in the lives of more than one million merchants on our platform, we need to be the retail operating system, which means we need to make it easy for them to sell anywhere where potential customers may be, whether that's on a place like Pinterest or a social media platform or in a marketplace like Walmart. But it all feeds back in one centralized place where they can manage the entirety of their business. And so as new potential opportunities arise in new channels, we think it's our responsibility to make sure that we make it easy for merchants to sell there and put it all through that Shopify operating -- that retail operating system. And so you'll see more of those come up. But we've been doing this for a long time. And the neat part, I think, about the Shopify offering is that before Shopify, you had to have 20 different tabs open to manage a multi-channel, omni-channel business. Now you don't. You can do everything from Shopify, which makes us further being the heart of their business, which is important to us.

[Katie Keita:]

Great. Thank you, Matt. Next question, please.

[Operator:]

Our next question comes from Siti Panigrahi of Mizuho. Please go ahead.

[Siti Panigrahi:]

Thanks for taking my question. During this time, you'll see the basic necessities like you said food, beverages and tobacco spike in terms of demand. I'm wondering, could you share what percentage of the GMV that represent?

[Amy Shapero:]

Yes. We don't break out our GMV to that level. We did see food, beverage and tobacco increase as a percentage of our mix in the second quarter, but we also saw mainstays, apparel, accessories and cosmetics, recover through the quarter. So the GMV growth was really a mix of all categories and consumer verticals.

[Katie Keita:]

Great. Thank you, Siti. Next question, please.

[Operator:]

Our next question comes from Colin Sebastian of Baird. Please go ahead.

[Colin Sebastian:]

Hi. Good morning. And thanks for taking my question. Perhaps a bigger-picture question for Toby or Harley. You have access to such a tremendous amount of data around e-commerce and transactions. Lots of potential there to capture insights from this data. If you could talk about the bigger opportunities from that data, including on the consumer-facing side of the business? And whether you're still confident that the underlying technology stack used by Shopify is adequate to manage the increasing complexity? Thank you.

[Tobias Lütke:]

Yes. Thank you. Yes. So you're right in as much as one piece of the parcel of data that Shopify didn't have insight into is how entrepreneurship and small business formation would act or look like in -- during a pandemic. So that picture is filling itself in. Of course, they are still early, so that remains to be seen. We had some minor data from the last financial crisis. But of course, that played out very, very, very differently. So I mean, the way we are thinking about data is that what we really want to do is help the merchants surface their own data, like given the insights from their own sales patterns, help them with their own decision-making on business expansion. On a macro aggregated level, we are learning how businesses are best growing, what might be the next step might be for the merchants that are looking for next steps to expand their business against the backdrop of different economic environments and states and industries and so on, so all of this is beneficial. This is all built on, I won’t call it, bleeding edge, but like we'll be very good at getting leverage from the latest technology. So like on day one, when I made technology decisions, I take that very seriously and Shopify on a very, very modern stack and in a modern approach. And this is a core value for engineering. So we feel very, very confident. And I know our technological foundations and being able to use the latest that the technology industry has created and come up with to make place.

[Katie Keita:]

Thanks, Colin for your question. Next question please.

[Operator:]

Our next question comes from Gus Papageorgiou of PI Financial. Please go ahead.

[Gus Papageorgiou:]

Hi, thanks for taking my question and congrats on a great quarter. Amy, I'm wondering if you could just give us some color on – if you look at the GMV growth sequentially, how much -- or I guess, year-over-year, how much of that was from your base of customers growing their sales organically due to increased sales occurring on e-commerce platforms? And how much of it was from adding new customers? Any, kind of, sense you could give us would be helpful.

[Amy Shapero:]

Yeah. Let me just start by saying that the GMV growth overall was really driven by the sudden shift to consumer spend from offline to online driven by COVID. And so what we saw was GMV per merchant increased significantly quarter-over-quarter and year-over-year as our merchants benefited from that tailwind. But we also saw more merchants and new stores joining the platform during Q2. And so we know that a higher percentage than normal were established businesses rushing online. Shopify Plus had a record quarter of net adds and new stores joining on the 90-day free trial for standard plans. There was a healthy mix of established businesses rushing online. So it really was a combination of those two. And again, I'd also like to just emphasize how broad-based the GMV growth was across all merchant segments and all geographies and across all consumer verticals.

[Gus Papageorgiou:]

Great. Thank you.

[Katie Keita:]

Great. Thank you Gus.

[Operator:]

Our next question comes from Ygal Arounian of Wedbush Securities. Please go ahead.

[Ygal Arounian:]

Hey, good morning guys. Thanks for taking the question. I want to ask on the POS. And you noted in the release that it's like getting back to February levels, which I thought was surprising, if not interesting. Retail in the U.S. in fact, where it was in February. So can you talk a little bit about what that means for Shopify? Is it taking share? Are your customers with their omnichannel presence, more inclined to drive stronger in-store growth? And have POS, kind of, outperformed overall retail? What are you seeing there? That's getting your POS kind of ahead of retail overall? Thanks.

[Amy Shapero:]

Thanks for the question. I think we mentioned on our last earnings call that we did see POS, GMV decline between March 13 to April 24, relative to the comparable six week period, but that we also saw that those physical retail merchants managed to replace about 94% of those that lost GMV through online stores over that same period. So we were pleased to see the resiliency there. We are now beginning to see more brick-and-mortar stores reopen up, not just in the U.S. but around the world. Hence, we are starting to see more of that retail GMV come back. That said, one thing that has happened through this whole process and through the crisis is that now we're seeing our physical retail merchants look at multichannel in a much different way. So for example, 26% of our brick-and-mortar merchants in English-speaking countries are now using some form of local in-store or curbside pickup and delivery options. That's compared to like 2% at the end of February. So we are seeing this new -- as physical retail reopens up, the business model for those physical retailers are also contemplating, a new type of resilient model, which allows them to sell-online and off-line. And then we continue to roll-out great new features for point of sale, things like staff permissions, retail level reporting. And so the point-of-sale product, the physical retail product just keeps getting better and better. But certainly, we are seeing more GMV flow back through physical retail than we did in the beginning of the pandemic.

[Ygal Arounian:]

Thanks, again.

[Operator:]

Our next question comes from Darren Aftahi of ROTH Capital Partners. Please go ahead.

[Darren Aftahi:]

Yeah. Thanks for taking my question. Hope you are all well. Question for Amy. So as you kind of think longer-term with the work from home and appreciate the impairment cost savings you kind of detailed. But as you think about things like travel spend, marketing, et cetera, like how does the P&L kind of benefit or not? What are kind of puts and takes longer term? Or you just reinvest those dollars you saved into other categories as you go forward? Thanks.

[Amy Shapero:]

Yes. Longer term, yes, we would expect to save some amount of money, obviously, on the office footprint itself, right? Most of those benefits, we're not going to see until a couple of years out, but that would be one benefit. Travel spend, yes, would decline. We've seen that happen as we've been working remotely through COVID, so we would expect that would continue. However, we would redeploy some of those savings back into helping our employees work from home effectively and their home setups and helping them make sure that they have great Internet connections and things like that. So it will be a little bit more like a shifting of expenses over time.

[Katie Keita:]

Great. Thank you, Darren. Next question, please.

[Operator:]

Our question comes from Deepak Mathivanan of Barclays. Please go ahead.

[Deepak Mathivanan:]

Great. Thanks guys for taking the question. Harley, can you give us some color on how merchants are generating growth during this COVID period? Are there any channels where merchants are seeing the biggest success? Clearly, there is a big online demand generation. I mean, shift to the online channels from a consumer standpoint. Was wondering whether merchants are using any specific channel that's seeing better success now? Thank you.

[Harley Finkelstein:]

Thanks for the question. It's important to understand that because we have such a broad range of merchants on our platform, and I mentioned some of them this morning, brands like Snickers and Chipotle and Coors -- Molson Coors, but also one million -- over 1 million small businesses. Not every channel is appropriate for every particular merchant. And so the onus is on Shopify to make sure that we have all the right channels for any particular merchants businesses. Particular type of product that would sell really well on Walmart.com may not sell as well in Pinterest or on Instagram or Facebook. And so that, I think, is the -- one of the nice -- one of the advantages of the Shopify platform is that regardless and despite whatever you are selling, there is likely the right appropriate channel for you. Now, of course, the most important and the most impactful channel is online store, followed by the physical retail shop by point of sale. But after that, we see merchants selling across a whole variety of channels, which is why we have to keep adding these channels over time.

[Katie Keita:]

Great. Thanks, Deepak. Next question please.

[Operator:]

Our next question comes from Brian Peterson of Raymond James. Please go ahead.

[Brian Peterson:]

Hi, everyone. Thanks for taking the questions. So I wanted to hit on the strength that you saw in Shopify Plus I'm curious, has there been any change in terms of the net new logos that you're adding? And I know one of your competitors has a product that's going into life. I'm curious if that's been a catalyst at all? Thank you.

[Amy Shapero:]

Thanks for that question. So we are seeing an acceleration of companies re-platforming off-legacy platforms. We've been seeing that for a while, but that acceleration has continued. We're also seeing digital transformation generally is pushing larger retailers to look at partners who are nimble, who are flexible, who are certainly cost-effective and that's at Shopify Plus for the larger brands. Legacy platforms were never meant to change quickly. And frankly, retailers need that right now. And so what we're seeing in terms of the types of customers that are dominating our Plus pipeline is digital natives that continue to choose plus scale globally; large CPGs that are rushing to go direct-to-consumer. And we are the preferred choice because they don't have fast they can launch and experiment with us; and then more traditional retailers looking to transform their companies are choosing us to do that as well. So that's the reason why seeing brands like Hurley and Schwinn and Snickers and Molson-Coors and the Chipotle farmers market, all use Shopify. It's -- there's not one type of particular merchant. And we're kind of seeing the -- we're seeing the acceleration happen across a bunch of different categories and from a bunch of different platforms.

[Katie Keita:]

Great. Thanks, Brian. Next question please.

[Operator:]

Our next question comes from Josh Beck of KeyBanc. Please go ahead.

[Josh Beck:]

Thank you for taking the question and glad to hear everyone is doing well. I wanted to ask a bigger-picture question about what's happening with the acceleration of e-commerce. I think you had commented that 2030 is maybe being pulled ahead a decade. And then you also made the comment that you expect this trend to persist. So I'd love to hear a little bit more because you have such great visibility and such a unique view about why you view this trend is durable because I just think that's such an important investor question. Would love to hear a little more color on that topic.

[Amy Shapero:]

Yes, gladly. So my comment was -- I mean, I came at this question a little bit more from a product perspective than from a financial perspective or from a market mix perspective, and I said that 2030 has gotten pulled forward into 2020. What I specifically meant is like anyone who's ever used like software that was written 10, 15 years ago, realize that it doesn't fit into the current times anymore because it's built on fairly outdated assumptions given how fast technology moves. I think in retail, they are all finding us from one day to the never of software that feels like a decade-old because all the assumptions have been like tossed into the air wear and reassembled based on COVID. Like an obvious example of this is the massive and quick rise of orders placed within 25 miles to local stores and local pickup and curbside pickup and all the things which has to be tooled by technology, and -- which we have done, I think, fairly quickly, and we see those bigger factors on the platform. But zooming out, multiple things happen at the same time, right? Like there's a lot of businesses who were just local stores. And that's the only way we've been connected to the global world of commerce. And once you had in place, orders came along; they realized that the only way for them to access their customer base was no longer functioning. And then either through -- in some cases, through community efforts, which I think is one of the , and sometimes for their own adaptability, they set up the online channels, informed the local environments that they are still open for business sort of make do with however they could. And that, I think, worked surprisingly well for a lot of entrepreneurs. And so as more and more local businesses came online -- local stores came online, I think one thing that was surprising to a lot of people, but actually seemed -- I think this had in terms of -- is that the demand for being able to buy from more diverse group of merchants was actually there, but the supply wasn't. I mean, it's very, very rare, but there's such a discrepancy between supply and demand. But the reason why the supply didn't come online is because of the steep complexity and just because of inertia, right? So, why go online? Why setup -- like, why change your point-of-sale system for something integrated in your online store? Why try switching to Shopify, your business is sort of working, right? And so COVID and -- has accelerated this thing this was already going on. People noticed that they did well, as Harley already mentioned, we are seeing strength in the point-of-sale channel. But of course, we also now from the macro numbers that small business have been going out of business, like there have been closures. If this is not -- I can't say this for sure, but like anecdotally, the business that did -- that were adoptable, switched to Shopify or started online stores or have been on point-of-sale and added the online channel successfully, which is our slice of the retail base, they've actually done okay and may have seen some growth because of the business that weren't as adaptable have maybe not made it out by the site after the shelter-in-place was over. And so I think a lot of ideas that were floating around, a lot of things that people were saying in the industry have gotten validated in this great experiment and test that we all went through in this industry. And now that there's a significant more supply for -- of merchants out there and that more buyers have the familiarity of buying from merchants directly. And also the awareness of what that does for the local economies, and that there's value in supporting local businesses, especially if you want them to stick around. All these things kind of mixed together into one big like average number percentage mix. And that's, I think, just a good deal higher than the e-commerce numbers before. So, yes, there's been some acceleration. It's going to be very hard to see. I don't – I mean, I don't think we can discern from our slice of the market exactly what these numbers are just because I think we are dealing now on Shopify is just a very adaptable and lease specific slice of a retail industry. And – but I think we've had a lot. And so that's clearly good for business. And I think that's why you see some of the numbers to be the way there.

[Katie Keita:]

Great. Thank you for your question, Josh. Next question please.

[Operator:]

Our next question comes from Samad Samana of Jefferies. Please go ahead.

[Samad Samana:]

Hi. Good morning. Thanks for taking my question. Amy, maybe this one is for you. So GMV was – was about 50% higher than 4Q. And – but I'm curious that platform and other revenue didn't quite spike way that it normally does from 3Q to 4Q. So I was curious, if there was either a mix shift in whether the GMV is generated, whether it was more of the non-Plus customers? Or if there is a reason why we didn't see as much of a platform fee overages in 2Q? And how we should think about that maybe going forward?

[Amy Shapero:]

I mean, we still saw a healthy increase in the platform fee revenue, so I'm not sure, I would read anything into that or in terms of mix. But I think it's largely because GMV was just so broad-based. And again, the highest grower in the category was international year-over-year. And so that does have a lower mix of – it's more standard merchants, but it was broad-based, and we still saw a healthy increase in the platform fee for Plus customers. Also, just keep in mind, sometimes the platform fee for Plus is impacted by certain merchants who are having flash sales, which may skew any given quarter.

[Samad Samana:]

Great. Thanks.

[Katie Keita:]

Thanks, Samad. Sure. Next question please.

[Operator:]

Our next question comes from Brad Zelnick of Credit Suisse. Please go ahead.

[Brad Zelnick:]

Great. Can you guys hear me now? Hello?

[Katie Keita:]

Yes. We hear you fine.

[Brad Zelnick:]

Excellent. Thanks for getting me back in. And congrats on all the success, I wanted to ask about GMV trends, specifically for those merchants located in countries that are easing social distancing measures. Are they decelerating faster or at similar rates to other areas like the U.S.?

[Harley Finkelstein:]

Yeah. I think it's really early to tell that right now. I mean, we are seeing, certainly, as Amy just mentioned, GMV growth in terms of the growth percentage was highest internationally, but we're also doing a lot internationally for those merchants and trying to find product market fit there. But I wouldn't necessarily say that we are seeing anything that is notable yet at this point, although we monitor it pretty closely.

[Tobias Lütke:]

Yeah. In the markets that have really done this, going back to normal also the markets that kind of weren't hit as badly, right? So like it's – its really, really hard to back out the these numbers.

[Katie Keita:]

Great. Thank you, Brad.

[Operator:]

Our next question comes from Chris Merwin of Goldman Sachs. Please go ahead.

[Chris Merwin:]

Thanks very much for taking my question. Can you talk at all about the early impact that SSN has had on the merchant and customer satisfaction or order volume? I think you also mentioned that SSN would be reaching scale phase at the end of next year. So does that mean -- well, I guess, will that include just partners? Or would you need to build out some of your own capacity at that point? Just curious what the current plans are? Thank you.

[Amy Shapero:]

I can take the capacity question and the plans. We're still on the same five-year plan that we announced last year at Unite, where we'll build the Shopify Fulfillment Network over a five-year period. We'll be in product market fit phase in 2020 and into 2021, with the expectation of entering the scale phase at the end of 2021 or soon thereafter, which is about the midpoint of the five-year build. And that is absolutely consistent with what we said last year. That plan that we announced last year had us mostly working with partners to add nodes to the Shopify Fulfillment Network. We had the seven up and running that we said, we would have up and running, and we plan to add additional partner nodes this year. We're not going to say how many or where pre announce it. But we're continuing down that path, working with partners because it's been working well. We said that we would continue down that path as long as they could meet our capacity and quality needs. And so far, they are. We did leave open the ability to build a few warehouses ourselves. We do have a test dev facility in Ottawa. But in the plan, in the $1 billion, which was mostly variable spend to fulfill goods, there was some fixed costs allocated to a couple of warehouses so that we could build and test and learn in the event that we do decide to build warehouses. But right now, we're on the same plan that we've been on.

[Katie Keita:]

Thank you, Chris. Next question please?

[Operator:]

Our next question comes from Walter Pritchard of Citi. Please go ahead.

[Walter Pritchard:]

Hi. Actually related question to the one that you just had there. So, about $4 billion in cash on the balance sheet was recent financing. We obviously know about the fulfill plans that require some capital. And you've got products like the Shop Capital product. Can you help us understand, how you're thinking about that cash you have as needed to run some of those businesses that are more capital-intensive versus M&A potential with capital you've raised versus just sort of having raised opportunistically to have some cushion? Thanks.

[Amy Shapero:]

Yes. I mean, we've been pretty consistent in saying that the $4 billion in cash is to increase our flexibility and optionality, whether it’d be build, partner or buy in order to accelerate our product road map. And so, we continue to just want the maximum amount of flexibility. And I think this actually might be a good place for me to address the shelf renewal that we did. I did address it in my remarks, but I think publicly, I've seen some headlines that weren't correct. I just want to emphasize that the shelf registration -- our shelf registration was due to expire in September. They're only good for 25 months. We did decide to renew a little early so that we could do it in conjunction with this earnings call, which is consistent with how we've done it in the past. And we had to put a fixed dollar amount on the shelf under Canadian regulations, which is different from the U.S., where seasoned issuers do not have to put a dollar amount in. The dollar amount just makes sense for flexibility. We absolutely consider this just normal ordinary course of business, and wouldn't read anything more into it than that. Thanks.

[Walter Pritchard:]

Okay. Thank you.

[Katie Keita:]

Thank you. We have time for one more question.

[Operator:]

Our last question comes from Tim Willi of Wells Fargo. Please go ahead.

[Tim Willi:]

Thank you and good morning, everybody. I had a question about the restaurant vertical. It's obviously changed dramatically in the last several months to really become an e-commerce and omni-channel industry, probably much more show than it's ever been. So, I'm just sort of curious on your perspective, how you think about that vertical as a new opportunity to maybe develop product or sales channels to be much more visible. And the bigger part of that industry than maybe you otherwise would have had been if this crisis had not occurred? Thanks.

[Harley Finkelstein:]

Thanks for that question. Look, I mean, we've been very clear that our focus is on retail, and particularly, physical goods. The restaurant thing is not -- historically has not been in our focus. Although we did feel that when COVID first hit there was a way for us to help restaurants by doing things like turning them into retailers, whether they're selling meal kits or they're selling some sort of physical product. And so, we did create a theme that allowed them to very quickly set up a very -- a beautiful online store and allow them to start making some cash flow during a very difficult time. But in terms of our focus on restaurants as a new vertical, that is not something that we're currently looking at right now. But if they do turn into retailers, as some of them have, or wine stores as others have, we certainly can help them.

[Operator:]

This concludes today's conference call. You may disconnect your lines. Thanks for participating, and have a pleasant day.