Hello, good afternoon, everyone. Welcome to AppLovin's earnings call for the third quarter ended September 30, 2022. Joining me today to discuss our results are our Co-founder, CEO, and Chairperson, Adam Foroughi, and our President and Chief Financial Officer, Herald Chen. Please note our SEC filings as well as our shareholder letter discussing our third quarter performance are available at investors.applovin.com. During today's call, we may be making forward-looking statements regarding future events, expectations regarding the market, the future financial performance of the company, and our strategic review of our apps portfolio. These statements are based on our current assumptions and beliefs and we assume no obligation to update them except as required by law. Actual results may differ materially from the results predicted. We encourage you to review the risk factors in our most recently filed Form 10-Q for the fiscal quarter ended June 30, 2022, and in our Form 10-Q for the third quarter, which we expect to file later this week. We will also be discussing non-GAAP financial measures. Reconciliations of our GAAP and non-GAAP financial measures are included in our shareholder letter available on our investor relations website. Please be sure to review the GAAP measures and the reconciliations as the non-GAAP measures are not intended to be a substitute for or superior to our GAAP results. Be advised, this conference call is being recorded, and a replay will be available on our IR website. I'd now like to turn it over to Adam for some opening remarks, then we'll open it up for Q&A. Please go ahead, Adam. Thanks all for joining us today. As this market continues to be difficult, it's easy to get disappointed, but you're not gonna hear any disappointment from me today. I've been building businesses for nearly two decades now, and one thing I know is it takes years, not quarters, to build a great business. We have several things to be excited about at AppLovin today. First, in 2022, we're gonna generate over $1 billion of EBITDA, growing nearly 50% over 2021. We're gonna convert a majority of this to cash. Our ability to generate so much cash allows us to patiently address our market and go after the business opportunities in front of us, even in a difficult market. Second, our business is incredibly stable. It's easy to look at our industry and realize how difficult it is right now, but it's really easy also to forget how big a sector we're in. Everyone's got a mobile device. Most people are playing mobile games. Many people are playing mobile games every single day. The size and stability of our category as well as our market-leading technologies give us a lot of confidence in our business long term. What are we focused on at AppLovin today that gives us a lot of confidence that as we go through this economic downturn and come out, we're gonna be a stronger business for it? First, and most importantly, we're focused on retaining our core team. Many of our key contributors have been at the company for many years. I've had the pleasure of working with each and every one of you. We're gonna continue to invest at AppLovin and make it a great place to work at. Second, we're really focused on attracting new talent. Over the last decade, there's been a talent crunch in Silicon Valley. More recently, we're getting resumes from incredibly qualified individuals, better than we've ever seen before. The opportunity to attract new talent and pair it with our existing and exceptional team gets us very excited. Third, we're working tirelessly to improve our core technologies. We see a path to doing so, and if we're successful, it'll allow us to create growth that we can control. Fourth, we're still investing in new initiatives, and we're very excited about these. They utilize our core technologies and core competencies and will enable us to go into bigger market opportunities. If we're successful here, we'll create immense upside for both our shareholders and team. Lastly, we'll continue to be strategic with our cash. We'll look at share buybacks. We'll also use this moment in time to try to attract new investors, shareholders that are gonna be focused on our long-term vision, just as we are. The market today presents a low multiple entry point into our company. What's interesting about that is we generate a ton of cash, so it gives us a good base, and we're also going after very, very big opportunities. If we're successful in executing around our vision over the coming years, we're gonna create outsized returns, private market-like returns. That opportunity gets us really excited. In fact, we're working harder today at AppLovin than we've ever worked before because of that upside. I'll now hand you off to Herald. Thanks, Adam. As we outlined in our shareholder letter, given the challenging backdrop, we are very much focused on what we control. Firstly, bolstering our leadership positions in our core markets and our core products. Second, using this cash flow that Adam mentioned to really invest behind initiatives that are focused on increasing the durability of our business, ultimately leading to long-term growth, which will then lead to enterprise value creation. Shifting to the third quarter, starting with the software business, we grew at 59% year-over-year. Based on our guidance from the second quarter, as expected, it was g enerally flat to the third quarter. EBITDA grew 49% year-over-year and achieved a 62% margin in the third quarter. We had 538 SPACs, a record, in the quarter, and that also had an NDRR, a net dollar retention, revenue retention of 166%. On the app side, which is midstream, our operational changes, as we previously discussed, the revenue was down 24% year-over-year, but EBITDA, which is where we're focused, was up 12% - 17% margin. On a combined basis, the total revenue was down slightly year-over-year, but EBITDA was up 35% to $258 million, a billion-dollar run rate, and achieved an EBITDA margin of 36%. Shifting to our outlook for Q4. We see Q4 coming in fairly similarly to what we achieved in Q3. If that's the case, then the year will end up at $2.8 billion with a margin structure around 37%-38% Adjusted EBITDA. The components of that we see would be software being over $1 billion in revenue with a mid-60s EBITDA margin. On the application side, we would see a $1.7 billion+ revenue stream with a margin structure in the mid-teens. Of note, going forward, we will only be providing our forward quarter guidance and will not be providing a full year guidance in the future. Talking about cash flow in a little more detail. We do plan on generating $1 billion of EBITDA this year. We also plan on finishing the year with over $1 billion of cash on our balance sheet. As you all know, we're able to convert a high percentage of the EBITDA to free cash flow given our very limited amount of CapEx. As Adam described, we're able to then reinvest those dollars and have the financial flexibility and the patience to invest in projects, not trying to chase quarter-to-quarter growth on things that don't yield long-term return, but really invest behind our team, our talent and our tech to ensure that we're in a great spot going forward. We also have $400 million of availability, over $400 million available on our stock repurchase plan. Given the stock market environment today and the rerating of risk, as well as our highly leverageable operating structure, where if we do have growth in our high margin, high cash flow business, we think the combination of today's stock valuations and stock multiples, combined with the ability to have high operating leverage when we return to growth, those dollars fall into the bottom line. We think for shareholders and for us in considering stock buybacks could be a very attractive return. With that, I'll turn it back to Ryan to go through Q&A. Thank you. Thanks, Herald. We'll now begin the question and answer portion of the call. If you'd like to ask a question, please use the raise hand function on your Zoom client. For those of you joining us. Could I ask about the software platform side, please? You've said previously that given the integration of MoPub, you've got all the integrations in the Asian market that you know game makers will simply have to continue that market position there. It does, however, look like, you know, the growth is slowing. I was wondering if you could maybe update us on your thought process as to how game developers are going about their advertising or where they are pulling. Is there any increased risk from, you know, some of these being small game developers, and therefore in a financial crunch like this, you know, high interest rates, maybe they're running into some sort of near-term funding problems of their own, and that might lead to them pulling back on spending. Thanks. A couple of things, packed in there that I'm going to address. First, we're on our mediation platform and also app discovery platform, we're market leaders. The MAX platform, that's our mediation solution, probably has the vast majority of all the ad inventory in the gaming sector running through it. Now, what's interesting about that is it gives us access to a diverse set of advertisers where we're not dependent on any individual one. Most companies this year have been going through their P&L and really cutting costs, so marketing and OpEx. Most companies are at a stable point now where you're seeing the gaming market not growing because of that, because of the focus on cash flow. You've also had that happen. Because we've got a lot of diversity and because the sector is so big and consumers are still engaging with mobile games as much as they've ever engaged before, and the biggest change was just this handicap of shift from growth investment to cash flow, and that's already been baked in. That gives us a lot of confidence in the stability of our business that I referenced in my comments a couple of minutes ago. Tim, did you have any follow-ups? No, I'll jump back in queue. Let some others go in. Thanks. Okay. We'll next go to Youssef Squali with Truist Securities. Youssef, go ahead. Hi guys. Can you hear me? Yeah. Excellent. Thank you. I guess just as a follow-up to the comments about the stability in the business, Adam. I know you guys are not guiding obviously to 2023, but how are you guys thinking about the puts and takes as you go through your own budgeting process? Do you think at a base level that 2023 is a growth year or not? Revenues from non-SPACs was down 34%. Maybe you can just unpack that for us a little bit, what drove that? No. I'll touch on the first point, and then we can come back to revenue from non-SPACs, because frankly, I think that's just a very small percentage of our numbers. It's just gonna be a volatile metric that doesn't frankly matter a whole lot. When you think about the business as it is, again, we're very strong in the market. We have very consistent business, so there's no share loss anywhere in our core technologies. They work really well for the mobile game developer. The one thing that we can't control that gives us hesitation on having long-term guidance right now is this focus of cash flow among our advertiser base and frankly, any company in technology today and away from growth. That's been baked into a lot of businesses at this point. Most managers are savvy enough to now have made the changes there. We just don't know when that reverses out, when the economy is gonna turn around, when there will be a shift back to growth and sort of when you get to the bottom of this economic downturn. What we do know, and that gives us confidence, is we're already there and the business is very stable. We also know that our core technology has a lot of room to improve. That was another thing I touched on, is that we're working really hard to improve it. Really, we have two paths to go. One is advertisers are willing to invest more into growth and cash flow, so they're gonna lower their goals and invest more dollars into our platform. The other is entirely in our control. It's improving the efficacy of our solution so that we're able to take the dollar spent and even at a tighter set of goals, drive more scale to our advertising partners. We see a path to doing that, and that's where both of those things give someone the cash that we're able to generate. We have room to grow with our control and one factor entirely within our control. Okay. At the top, we'll comment whether 2023's growth year for you guys or not? Our overall ability to improve our core. Right. On the non-SPACs, the reason I was asking is to try to get a sense of whether you're seeing more of the weakness among the smaller kind of software platform clients or among the enterprise, 'cause the non-SPACs would tend to be smaller. Yeah. Honestly, we don't actually look at each individual business. None of these partners make up a big part of our business. It's just as a whole, we all know that every company's under a lot of pressure right now to cut costs. There has been just cost-cutting and budgetary constraints across the advertising sector. That's impacted most businesses, whether small or big. Okay. Thank you. Thank you Youssef. We'll next go to Eric Sheridan, Goldman Sachs. Eric, go ahead. Thanks for taking the question. Hope you can hear me okay. Maybe two, if I can. First, on the software platform, intrigued by the comment you made in the letter about continuing to invest for the long term against potential new use cases. Away from the dynamic you find yourself in the market today, maybe sketch out a little bit about what you're sort of investing against for the longer term and how you see the software platform continuing to evolve. That'd be number one. Number two, turning to the app business. Felt like based on the letter, there was a fair bit of puts and takes in the quarter, the relevance of selling non-strategic assets and some investment being redirected in different elements. Can you talk a little bit about some of the headwinds and tailwinds, just historically, that business faced as a result of those decisions in Q3 that impacted the absolute dollar amount we saw? Thanks so much. I'll take the first question Eric and Herald will jump on the second. When it comes to our core business, that we're pretty large scale at this point. We've talked about processing billions of dollars a year of advertising budget, and we're netting quite a bit, well over $1 billion a year in software revenue. At that level of scale, we've built very good core technologies there. We also touched on a couple quarters ago about some investments in new initiatives. These have option value in our business. Frankly, like I said, I've been building businesses over a couple decades. It takes years to be able to build a business to make an impact on a business as large scale as ours. What gives us confidence going after these is they use the same core technologies and core competencies as our main business. One of those is extending our advertising solution to CTV. We did an acquisition there with Wurl that we're very excited about. They have core technologies that are differentiated, and as we get our ad technologies to be sophisticated enough to extend to CTV, which is a work in progress, they'll be our go-to-market there too, and the two technologies will couple together. Initiatives like that, we're not baking into any of our forward outlook or thought process around the short term in the business, but we think long term will create immense shareholder value and value for our team. Yeah. Eric, on the app side, I think we're making very good progress against our initiatives to get our portfolio to the position we want to get in terms of both the margins and in position for growth. I'd say really there's three things that have taken place there. One was instead of just driving users to gain in the day, we really cut back on the UA to make sure that we were driving strong ROAS. As we know, small marketplace, you know, ROAS is even more difficult to come by. We've managed that UA. The second lever is going through the portfolio, which ones actually have the ability to drive real enterprise value for us in the long term. There's some that frankly need more investment and more team, and there's others that really won't get there. We're in the process of winning through that. Some of the studios we've just shut down or sold back to the founder. We're negotiating some of the earnouts. Others we're actually investing in quite a few new games. The third lever will then be ultimately which portfolio that we want, we wanna own and grow forward. We think that'll be a healthy portfolio. We hope to get there, you know, really by the end of this year is what we talked about. From there, it really depends if the market recovers in terms of valuations on whether or not we'd actually be able to monetize any significant portion of the portfolio. We may end up owning all of it or with the right bid, you know, we may end up selling all of it. Given the macroeconomic environment and where purchase multiples might be out there, you know, our focus is very much on owning those assets for now, optimizing them, and then figuring out what value creation could be had down the road. It is a significant amount of value, you know, relative to our current enterprise value, and it would be, you know, very accretive leveraging to us, we think, with the right price for the right assets. Are there any follow-ups for you Eric? All good thank you. Okay thanks Eric. We'll next go to Clark Lampen at BTIG. Clark, go ahead. Hey guys good evening Adam you talked a couple of times about improving your own core technologies, and you alluded to that a couple of times sort of intra-quarter back in August and September. I wanted to see if maybe you could give us just a small window into sort of what you're working on, how that's progressing, sort of what's in focus. Then on diversification and appreciating that you guys are operating this business with more of a long-term mindset right now, and I think as you said, like a private entity, what kind of growth for businesses like Wurl or perhaps also Array or Adjust next year? Maybe along those lines, has Apple's change around in-app NFT utility changed the priority in terms of which of those new businesses you do wanna focus a little bit more on scaling and growing? Thanks a lot. Thanks Clark I'll go second first, then back to the first question. We're focused on investing initiatives, but we know how to build businesses with the cash flow mindset from the very beginning. As a company at AppLovin, we were profitable our second month in operation, and every one of these new initiatives we take that same approach into. We're excited about the opportunity. We leverage a lot of the resources that we already have in place, and the incremental investments that we're making into them are not material given the market opportunity that they present us. We continue to approach any business opportunity that way. We think on the startups and the GMs that we have running those businesses also think of them as the CEO of a startup. You have a new business that you're trying to incubate and build, a lot of times you wanna do it organically, make sure the product market fit is there, not over-invest early. We will invest behind growth every time that we have something that's hot and that making an impact to our numbers of revenue and costs. On the first question, when it comes to core technology, we always measure the error rate in our predictive events. The workflow we engage with next in driving value to our advertisers. Value comes from revenue, so we gotta be very, very good at predicting and a preview of that. We know that there's error in our system. There's a lot of incremental changes that we as a technology company will do at all times, but very rarely go and rebuild a lot of our core system. We're doing both right now, and the last time we rebuilt a lot of our core system to try to get an upgrade was actually the initial release of Axon, which was now I think about two years ago, and obviously facilitated a ton of growth in our business. We're very excited about the potential of all of our investments in technology into our future. That's really helpful. If I could maybe, Herald, just as a quick follow-up, you have north of $400 million in authorization for your buyback right now. I know that you have a lot of sort of attractive capital, excuse me, capital allocation opportunities in front of you. How does, you know, the sort of stock buyback option fit into the overall priority set right now? Yeah. Thanks, Clark. Look, it is a high priority for us to allocate our capital wisely, particularly when there's opportunities, you know, that arise in this market. Maybe it's our own stock, maybe there's other assets that have gotten a lot cheaper that we'd wanna own, or it's just hiring a lot of great people that we didn't have access to before. We're taking advantage of the time and making lemonade out of these lemons, and we're glad to have the EBITDA that we do and the cash balance sheet that we have. Certainly at these stock prices and given all the upside opportunities we see in the free cash flow characteristics and just the cash-on-cash yield that we can project out, we certainly are considering, you know, stock buyback, and we're sizing $400 million. We'll have to figure out, you know, what's the right amount to use in what period of time. Thanks guys. Okay thanks Clark. We'll next go to Matthew Cost at Morgan Stanley. Matt, go ahead. Hey can you hear me? Yep. Okay. Adam, hi. Hi, Herald. It seems like the overall app install ad market has been decelerating over the course of 2022, but has not reached the level, you know, that we've seen mobile gaming and consumer spending on mobile gaming reach where you've got, you know, market year-on-year decline. Is it a fair statement that maybe the ad business here is a lagging indicator to what consumers are spending on mobile games and, you know, does that create maybe more risk for next year, which you're reacting to? That's question one. Question two is, are there any indications or data points that you'll be looking for? I know you can't predict the future, but that you'll be looking for to try to assess when the market has bottomed and maybe you'll be looking for opportunities to push harder on investment at that point. I'll take second first again, just top of mind. Look, we're investing in our business as it is. It's been a high margin business 'cause we've got a lean team, but we've got an exceptional team that gets a lot of output. We invest, so there's things about opportunities. The market itself has been declining. The other change that came obviously to the sector right around the same time as the economy fell off is that IDFA change. Traditionally, mobile gaming companies were able to spend a lot of their revenue back into user acquisition, mainly on some big social properties to be able to grow. Those guys had the best return on ad spend. They were highly targeted, and they were able to use those profits to subsidize future growth. Take that away and you have two things that really hit the category, and both of those happen at the same time, so you can't really decouple them. Both are also baked into the business. Our business, we're fortunate enough to have massive penetration in the market we operate in. Our mediation product is market leading and our AppDiscovery product is market leading. We've got no dependency on any single advertiser. The nice thing about mobile gaming is that it is a very monetized industry when it comes to advertising. All of our mobile gaming categories have multiple gaming companies that all look very similar to the AK9. They certainly have different products, but if you think about some of our biggest advertisers, they make solitaire games or they make puzzle games, and there's 100 other ones of them that look the same, and most of them are marketing on our platform. Even if a couple of them start struggling as businesses, the other ones just fill in the gap. Therefore, we look at our business as in a very stable place, and we don't see much more deteriorating going forward. Would it be fair to assume then that, you know, your quarter-ahead guidance does not, you know, contemplate material further deterioration? Yeah, I think we said stable. Got it. Thank you. Okay thank you Matt. Okay, we'll take our next question from Stephen Ju at Credit Suisse. Stephen, go ahead. All right thanks, guys. Adam to dig deeper on the topic a little bit more, I think you've previously talked about how it has helped. I think accuracy don't tend to enlarge about well CPI. So far, I guess, to. Yeah. You roll back on upgrades, step ups. When you roll out a technology like that, you have adopted advertisers, so we have predictable growth in the double digits, I think around 20% for four consecutive quarters. That came from the upgrade in the engine. The upgrade to the engine really is a step function opportunity, whereas your incremental upgrades end up just baked into your numbers. This isn't to do with CPI, though. It's not that we were able to improve the accuracy and drive up CPI. Our goal is to say advertisers have their goals. Our advertisers are willing to spend today in our platform at whatever return on ad spend goals they set, the amount that they're willing to spend. We have a lot of excess budget that we're not able to fulfill today. If we're able to improve the accuracy of our predictive engine, we'll be able to fulfill that excess budget and maintain advertiser rates similar to where they are so that the advertiser is happy and we're growing our business. That's the opportunity that we're excited about. That's a performance business at its core. On the second question, in the move from mediation to real-time bidding, we've talked about this in the past. There were some early adopters of real-time bidding, and a lot of the market is going to move there over time. There's just some technology companies that are still getting to the point of being able to support real-time bidding instances. Now, the biggest and most interesting partner there for us in the future is Google. There was an announcement a couple months ago about their investment in real-time bidding. We're one of the launch partners for their efforts there. They're starting to see strong success there. We love that partnership. Together, if we can facilitate Google moving towards real-time bidding, it'll really end up tilting the majority of the market over to it. We're excited about that. It'll create efficiency gains for publishers, incremental revenue for the publisher that will then flow back into user acquisition. Obviously, we can charge for it, so it improves the biz opportunity we have with the MAX product. We think there's a lot of gains to be had there over the coming quarters and years. Okay. Herald I think, up to 40% of your revenue base is coming in from international. Given the strength of the US dollar, that had to have put the squeeze on revenue growth for you guys a little bit. Can you talk about the FX headwinds probably separated for perhaps the software business as well as apps? Thanks. Yeah, for us, a lot of the app side is transacted in dollars and through app stores. Really more the FX headwinds, you know, it's probably more macroeconomic. If people are just backing the currency, then it's just translated into dollars for us. We don't actually for our specific P&L on the software side as well, just if there's some currency translation of someone buying a good in-game itself, for example, you might see it there. For us directly, it is not doing that. Okay. Thank you Stephen we'll next go to Jason Bazinet with Citi. Jason, please go ahead. Can you hear me now? Look, you know, specifically in other big markets, you know, from IDFA, they're making investments into enhancing their infrastructure. You know, once they get around to completing that and have it available for general use, market share could kind of come back to them. I was wondering if you had any thoughts on how long, like, how many years that would take before some of these players, like Facebook, you know, could get there. Yeah. Thanks for the question, Mark. We can't comment on what other people are investing into or how long those investment efforts will take. The reality of our sector is we want the pie to be growing. If the pie is growing, it means advertisers, these mobile gaming companies in general, are able to reinvest more dollars into user acquisition. We've got a strong share of that pie. We've always had a strong share of that pie. We had a very strong growing business prior to the IDFA change. We didn't really change a whole lot after the IDFA change, and now we're just caught up in the macroeconomic cycle. The reality is that IDFA change is a burden on the growth of the whole sector. We want our advertisers, including our own gaming studios, to be able to invest on Facebook and other properties as successfully as they possibly can. The deployment of dollars in efficient in ROAS-based advertising creates this upside to the category that did fuel a decade of consistent growth. Take that away and it creates a handicap. We have no fear of that. We hope that all the technologies in the ecosystem continue to innovate and improve. We also, as a possible growth opportunity, are hoping that Apple and the other and Google and other platforms bring more inventory online, because as Apple continues to invest in their advertising efforts and they talk about bringing more inventory online, it creates more places for these same advertisers to go invest, and again, grow their business. Because our business is performance-based, that never means that we lose budget. It just means that the businesses of our advertisers will improve, which then ends up allowing them to be more stable companies and they invest back in our platform as well. Okay. If I heard you right, it sounds like you're saying that, you know, a resurgence of, you know, those dominant companies pre-IDFA is actually more of like a tailwind of benefits for you guys rather than a headwind. Yeah. We want a growing sector. The growing sector is winning together, and we have market leadership technologies when it comes to monetization, mediation, and growth. We've got a very strong base to our business. We were always totally fine, doing very well, growing consistently prior to the IDFA change, and we'll see that afterwards if these companies do make their technologies more efficient again. Any other follow-ups Omar? No other follow-ups. Thank you very much. Okay, great. Thanks Omar. We'll next go to Franco Granda with D.A. Davidson. Franco, go ahead. Yeah. Good afternoon, everyone. Thanks for letting me ask a couple questions here. I was wondering how many studios are you down to at the moment? How many do you own? How should we think about the performance-based payments for the studios given the lower expected revenues? Yeah. We have about a dozen studios now, and we are, as I think I mentioned before, in the process of renegotiating some of those payments. The vast majority have already been paid out, and some of those studios are obviously not performing and not gonna hit their earn-outs either. The projected earn-out payments are not terribly significant. We hope as we restructure them in a way that there's more alignment for the new world and the new expectations that they succeed and we succeed along the way. They're very much gonna be aligned with our success going forward. Awesome. Thanks for the color. Can you speak to what the business world is like at the moment? Where do you expect it to trend for the year, relative to your expectations entering the year? Maybe any color around customer engagements that could translate into revenue next year. Yeah. We're excited to own Wurl. Obviously, it's a very big category. If you've been looking at some releases of companies that are involved in the CTV category, seems to be the one place that there's some reintroductions and some growth. We're excited to be entering the category and assessing our best strategies there. Wurl in and of itself in terms of revenue is still very, you know, relatively small, but growthful. You know, it's in the $30 million, $40 million, $50 million range in terms of, you know, where it's gonna grow to in the near term. Not meaningful from our revenue standpoint, but it is very strategic given the inventory that they operate with, given all the partners that use them for the distribution of content. We think it's an interesting way to enter the category instead of us trying to do it from a standing start. We've got a team of people that are thinking about it every single day. As Adam mentioned earlier, we're very much partnered up with them on the technology side, using our ad tech technology and their experience, which is in the CTV category, to figure out what are our best plays. That's gonna be a longer term play for us. It's a big category. We wanna figure out how to get it right. It's very dynamic. A lot of players in the space and walls going up and groups coming together. It's something we're very focused on and excited about, but still pretty early. Thank you. That's it for me. Okay. Thank you Franco. We'll next go to Martin Yang with Oppenheimer. Martin, go ahead. Ryan can you hear me? Yeah we hear you Martin. Good afternoon I wonder, getting to the mechanics when a diversified publisher goes back to UA and focus on ROAS, assuming, you know, a customer of yours does the same as you treat your apps and how does it impact your AppDiscovery and AppLovin and Exchange respectively? Yeah. That's only directly impactful to us, Martin, on the app discovery side. The ALX business is third party demand sources that aggregate a lot of demand. They have the same or different models to us. On the app discovery product, if the customer, say for instance, wants to spend $1,000 a day at 10% return on ad spend, they're going to make $100 a day in the first 24 hours. Our systems are very good at driving advertising for them that will yield that return. Now, that may back into somewhere around, let's call it a 270-day return on ad spend, where they break even on the $1,000 spent, and they may be looking at this economy and saying, "We can't afford to wait 270 days in order to break even on $1 invested." They pull back the date. What they would do is they'd go and spend in the first 24 hours. And again, that in our system produces on ad spend, raise budget and yield it. That's really the change that echoed through the industry, is that as advertisers have had to get tighter with the cash that they're able to invest on user acquisition, those just automatically flow through our system. Now, also as this economy goes the other way and we get back to a growth period, hopefully at some point into the future, it'll go the other way where they lower their goals and automatically we'll have to step up in the dollars so we can go spend on their behalf, drive them their new economic goals. Thank you. One more follow-up on margins for software platform. Aside from your own investment decisions regarding OpEx and anything else that are in your control, what are the potential factors that could impact your software platform margin? You know, Martin, we report on a net revenue base to start with. We do take out the vagaries of you know, having a gross to net for net revenue. Below the line there, though, it's really the data center cost, which we've talked about before, and we have our contract in place and that we have a you know, very good handle on, know what that cost will be. Our team is in place. Yes, we are trying to add you know, awesome talent that's available to us now. You know, we're not talking about you know, dozens and dozens of people you know, at a time, so I wouldn't see any real significant increase there. Our new initiatives, we are spending against already, so it is in P&L as part of our operating expenses today. Now, if one of them catches fire, you know, do we increase dramatically there? Potentially. As Adam said, we've always been very cash flow focused and return focused. We'll do the right thing there. In product, I like, but if there is a gain that we see, in the past we've done that with Project Banker and others. There's a gain that we spend to possibly down margins on a quarterly basis as we scale a gain. On the software side, we have a high degree of confidence and visibility into that, you know, now mid-sixties margin structure, including new initiatives. As the core technology ramps up, there's a significant amount of flow through per bank dollar, you know, to the bottom line from the stack, right? As well as our Thank you Martin. Let's go to Ralph Schackart with William Blair. Ralph, go ahead. Thanks. I'll take a question. I jumped in late, so I apologize if this has been asked. Can you maybe talk about sort of the softness and I think on the call you had said that you feel that stuff is, or that business has stabilized. Just trying to understand sort of linearity of the pullback and sort of the comp. Yeah Ralph we referenced in the last call that we've been pretty stable. It's not that we're seeing any trends change late in the quarter at all since then. We signaled we thought that it would be relatively fair. Right now we're in an ecosystem that is sort of priced in all of this, and so we see stability everywhere in this business to some extent. Okay. Just a clarifying question from me, within the apps business about the sale of non-strategic assets. Yeah. There was one actually very, very small asset that we sold back in the quarter. They went on the entity, going forward. Very very small. Okay thanks Adam thanks Herald. Okay. Thank you Ralph we'll go ahead and start our last question from David Pang with Stifel. David, go ahead. Hey guys thank you for the question. I just wanted to see if you could provide an update on that you highlighted last quarter. For Herald how are you thinking about leverage in general in rising rate environment? Thanks. Yes we're stable again super stable. We are kind of turned on pretty much to all the mobile DSPs at this point. Really the shift is a year ago, not even this quarter, 'cause they're ahead in our business. The backend platform. They're doing very well with the new infrastructure and system. Massive in terms of the pipes being connected up to the DSPs. We're there. In terms of them being able to spend materially more than they weren't doing in the past, we're actually there as well because our business is similar. In the long term, there's really gonna be an opportunity for dollars through our system. Yeah David thanks for the question just over 2x net leverage, which is where we've been all the way through, you know, four quarters in terms of the rating, feeling comfortable there as well. You know, our market rates have gone up significantly, something we watch, more than half the interest fixed for the year. Our duration also is fairly strong. With term loans, there's no payments or anything like that on it as well. It does provide us quite a bit of flexibility. We're very comfortable with the current leverage levels, and we still generate, after interest costs, you know, a significant amount of free cash flow. As we described before, we have a relatively modest rate, given a bunch of deductions. We have very little CapEx, you know, costs in there, just a little bit of leasing expense. You know, we are able to flow through a very strong percentage, you know, even with the amount of leverage we're carrying today. David did you have any follow-ups there? No we're good. Okay well thank you everyone for joining. That does conclude our call for today. We appreciate you hopping on, and we'll speak with you all next quarter. Thanks everyone.