Seriously, name a competitor – Carsales.com | Summer Series

Bryce: [00:00:22] Welcome to the Equity Mates Summer Series proudly brought to you by Sharesies. Over 12 episodes where deep diving into some of the most exciting, interesting and well-known companies from Australia and the US. Each episode we're also joined by an expert to help us unpack the key metrics the bull case and the bear case for each company. My name is Bryce and as always, I'm joined by my equity buddy Ren. How are you going? 

Alec: [00:00:43] Oh, I'm very good. Bryce is better than you at the moment. I'm excited for this episode. I'm excited to talk about this company that perhaps doesn't get the excitement that many of its Internet first generation peers get. We'll get to that. But first of all, for the third Christmas in a row, it's not the Grinch ruining Christmas. It's COVID ruining your Christmas. 

Bryce: [00:01:07] I know. It's unbelievable. We've got a few episodes to go recording. Summer series Christmas is just around the corner and I've been busted with COVID again. Third year in a row. 

Alec: [00:01:18] But the confusing thing for people listening is that the order in which we've recorded the summer series episodes isn't the order in which we release them. So you might be perfectly fine and chipper next episode. 

Bryce: [00:01:32] Yeah, but it's just.

Alec: [00:01:34] Gonna keep people on their toes. But yes.

Bryce: [00:01:35] That's it.

Alec: [00:01:36] In 2020, it was the Strawberry Hills Hotel. In 2021, it was your engagement party. And the 2022. 

Bryce: [00:01:47] Who knows. 

Alec: [00:01:48] The same. 

Bryce: [00:01:49] The Equity Mates summer series is proudly supported by Sharesies. The Sharesies platform was awarded a 2022 Canstar Innovation Excellence Award, with the judges saying the platform is, quote, unique with a significant wow factor as it reduces barriers to entry for new investors. And the second reason is that the platform is easy and approachable, especially with the auto invest feature where you can now truly execute dollar cost averaging into Australian, US and New Zealand markets. You can now download the Sharesies app or visit sharesies.com.au To learn more. And if you'd like $10 in your account to get started. Use promo code GROW when you sign up. Promotion agencies apply. As always, the content trade continues and we are super excited as we're getting towards the end of the summer series recording and we've had some awesome companies and experts joining us and today is no different. We are deep diving into Carsales, Carsales Dotcom and we're very fortunate to also be joined by a returning expert, Elise Kennedy, who is vice president of research and head of technology research at Jarden. So she'll be joining us in the second half of this episode to unpack key metrics Bull Case and Bear Case for Carsales. But as always, let's kick it off with in one sentence What is Carsales? 

Alec: [00:03:11] An online marketplace for second hand cars, bikes and boats. 

Bryce: [00:03:16] Love it. Super simple business and one that you'll you'll hear in more detail when we speak to Elise, but one that is absolutely dominating the market here in Australia. So founded in 1997 and listed in 2009, as I said, it's an Australian company but has expanded its operations around the world now Chile, Mexico, Brazil, South Korea, Argentina, Thailand, Malaysia and Indonesia, and most recently brought Bought Trader Interactive, which is its big foray and push into the US, which ren we know if that can come off and as Elise discussed in the bull case is is massive if they can hit that US market. 

Alec: [00:03:59] Yeah so but like when we're talking about the history of a company like Carsales, it is you group it with ARIA group, which is real estate. Secondly you and sake. So Aria Group was founded in 95 sake, was founded in 97 and Carsales was founded in 97. And if we think about that moment in time, that was the first dotcom boom. And you know Malcolm, according to Tony Abbott, Malcolm Turnbull was bringing the Internet to Australia. So when he founded or co-founded Aussie Mail, but you have this technology boom happening in the US and we have something on a smaller scale but you know, similarly transformative happening in Australia and those three companies Sake Aria, Group and Carsales have really become dominant franchises in their respective verticals buying houses, buying cars, buying a career, getting getting a job. And I think what all those three businesses really did was disrupt Rupert Murdoch's rivers of gold. People talk about how Facebook and Google killed print journalism, but it wasn't those two. It was companies like this that disrupted the news business model and brought it online and took that revenue for themselves. So in the same way that RPA is dominant in housing, actually costs are. What is more dominant in cars than ARIA is in housing. I don't know what the market share is for sake, but I imagine that pretty dominant as well. But that's how you've got to think about these businesses. And it's not just how they were founded and, you know, their business models and stuff like that, but it's also what they're doing today and really what they've been doing in the last decade, which is try and extend their dominance in Australia, overseas. And all three of those businesses, as well as some newer dominant Australian businesses like Airtasker have had, I guess we could say, mixed success pushing overseas. But they all have this like rock solid market share dominant position in Australia as the sort of bedrock of their business. 

Bryce: [00:06:06] And the questions always the same really. We throw to an episode that we did in the last summer series on ARIA Group with their CEO Owen Wilson at the time fortunate enough to get him on and he was talking about their expansion into the US. And you think about a bookcase in the stories, the same dominant market share here in Australia. So how far can they push their overseas, overseas businesses? And really that's what goes into building bookcases for these. And then similarly the bear case is, well, if that doesn't eventuate, how big do they really get? 

Alec: [00:06:36] To be clear, Owen Wilson is still the CEO of Aria Group. 

Bryce: [00:06:39] Yeah, yeah, yeah, yeah. What did I say?

Alec: [00:06:41] You said oh, you just said the CEO at the time. Oh, well, which is factually true. He was the CEO at the time, but if any ARIA shareholders were desperately googling it.

Bryce: [00:06:51] Still CEO. 

Alec: [00:06:52] Yeah, it was at the time and at this time and hopefully in future time when. [00:06:56][4.3]

Bryce: [00:06:56] You're listening to this. So the company today, they obviously the main part of the business is the car sales dot com business. But then they do have a number of, I guess, acquisitions that they've made getting into new markets overseas. So they have a data services business with operations here in Australia, New Zealand, China, Thailand, Malaysia called Red Book. But then other businesses around around the world. Web Motors is in Brazil and CAR is their South Korean business. Chile Autos is in Chile, solar autos in Mexico and Trader Interactive is that big one in the US. Some great names there. 

Alec: [00:07:33] Yeah. So if you think about a business like car sales, so this stat blew our mind 6.7 times more web traffic than their nearest competitor in Australia. So almost seven times the amount of web traffic. So for every seven website hits to car sales dot com or a year, one is going to price. What's the second player in this market? 

Bryce: [00:07:58] Good question. 

Alec: [00:07:59] Case in point. I actually don't know the price, but I think it might be Cars Guide or AutoTrader. But I think that is the point. If you're a car dealer and you're falling out with car sales, you've really got to suck it up because that's where you've got to play. And so with that dominance, they now have a two things that they're trying to do. The first we've mentioned is push overseas. So replicate this business model overseas and move the pretty offline process of buying and selling second hand cars online, move it online. And then the second thing they try and do is increase the upper. That's the classic software metric. But average revenue per user, they want to figure out ways to do that and that might be cross-selling with dealers. So, you know, selling them data and different advertising packages and stuff like that. But it's also like how can they get more money out of consumers? And that's where the introducing products like Instant Buy, where you can actually instantly sell your car to car sales. And they don't actually, I don't think they put it on their balance sheet. I think they just have a network of dealers that they have deals with. And I imagine the economics of that is you do an instant buy and car sales not lowball you, but maybe don't give you the full amount. And so you take less to sell it quicker. And so that that's the name of the game for all of these businesses sake. Aria Airtasker Car sales, how do you increase revenue per user and then how do you break out of Australia. 

Bryce: [00:09:42] And you'll hear from Elise. But she did mention that because they have such competitive advantage and such dominance of their market, they can raise prices when they want to. And really the impact on that is quite insignificant because they're just so dominant that they have pretty significant pricing power. So just to put some other numbers to it around, you mentioned they're 6.7 or seven times larger than their nearest competitor. Incredible traffic as well. Similar story to ARIA Group, but they're getting 46 million unique audience hit their websites per month. You know, that's incredible. They had 19 billion paid. Views through F1 22. It's a phenomenally large business, 2.1 million vehicles listed. Now, I had a look at Gumtree again and they had 112,000. 

Alec: [00:10:31] So okay. And to be fair, to be fair, these AI, these would have to be global numbers. No Australian numbers. 

Bryce: [00:10:39] Yeah. Yeah. So yeah, 1.3 billion sessions on that website throughout the year on their marketplace. So incredibly large numbers and yeah, absolute dominance. Love to say it here in Australia. Let's have a look at some of the other key numbers financially. So market cap of $8 billion, they are down 11% so have underperformed the ASX this year but probably been caught up in the tech side of the sell off. But they are up 59% in the past five years. Revenue of $509 million. Five years ago that was 372 million, so up 30% over the 37% over the past five years and revenue up 19% last year, which coming out of COVID is pretty, pretty impressive result and they are profitable run. So despite being a tech company, they are profitable $161 million in profit, up from 109,000,005 years ago. So 48% growth in profit over the past five years. But revenue was up 19% last year but profit was up 23%. So also not a bad result. 

Alec: [00:11:42] Can I have one small gripe with this company? Yes, they actually call themselves core salesforce.com. Like that's the company name, but they don't use that URL. If you go to car sales dot com, it redirects to car sales dot com that are you but obviously if they put you in the business name, it would feel too Australian to Australian investors. So they have called themselves Carsales Dotcom. 

Bryce: [00:12:08] Yeah. And but interestingly in all their logos, it's just carsales. 

Alec: [00:12:12] Yeah. For me it feels like just colleagues of Carsales. 

Bryce: [00:12:15] They need to go to a branding agency. 

Alec: [00:12:17] I mean, they were started in 97 and in 97 in like the late nineties. If you put dot.com in, you know, yeah, you got a big valuation bump because it's 20, 20, 22. Put a lowercase, put a lowercase I at the front of your name.

Bryce: [00:12:30] It was like in 2001, 2002. No, sorry. 2020 companies that put web three or crypto in their. 

Alec: [00:12:38] Treasury are just. No. Well, yeah. So we had dot.com, then we had the, when we had a lowercase a, you know, like sales and stuff like that. And then when, when the iPod got launched and then the iPhone they had that small I. I carsales and then, then we had 2.0 I do remember that was a thing for a while. Carsale 2.0 to be clear, this wasn't then we're just, you know, and then yeah, you're right. And then like Blockchain Corporation or like token. Anyway, I don't know where we're going with this going anywhere. So talk to me about the market and where Carsales sees its future. 

Bryce: [00:13:20] Well, Carsales really sees its future, and as we said at the top in expanding overseas and growing market share overseas, if they can really crack that US market then they have a real opportunity to expand what they're doing here in Australia. It really is just around international expansion. 

Alec: [00:13:40] I think the key thing to understand before we go to a place is that car sales similar to ARIA group isn't trying to disintermediate the dealer. They work with the dealer in the same way that realestate.com.au dealer you works with the agent and in many ways the dealer is the key customer and it's often the dealer that they make more money from. The key metric to look out for a company like car sales and a company like ARIA Group is how are they hoping that key customer because you know they can have 2 billion website hits a month ARIA group can be the number one visited real estate platform and that's great and that but it's like how does that translate to better profit margins for real estate agents and car dealerships? And that's the question. They have this metric in their most recent investor deck dealer profit margins are high gross profit per used car. In 2016 it was 20 $100 and that slowly crept up. But 2021, just because of the used car market in the middle of COVID, it was over $3,000 a car per use car. And so I think that's that car sales value proposition to dealers if they can improve their gross profit by getting them, you know, quicker turnover by sourcing them better cars, whatever it is, giving them access to a bigger potential group of buyers. If you're going to invest in car sales or if you going to make a better case for car sales, it's how do they interact with the dealer. The big question is, over time, can they replace a dealer? 

Bryce: [00:15:18] Yeah, you're right, Renn. And I think we. Here's some thoughts on that from Elise, but I don't see why not really. That's at some point in time.

Alec: [00:15:26] My only question is how the market would function like market liquidity. I feel like dealers play a really important role in getting inventory, like being a buyer and seller of not of last resort, but just like keeping a market liquid. Because what you can't have is you can't car sales, can't have the dealers out. And then all of a sudden no one wants to buy half the cars on their platform because if a car market dries up, all of a sudden would be sellers who would become buyers all of a sudden aren't buying. And there's, like, a ripple effect. 

Bryce: [00:16:00] Yeah. Yeah. Yeah. Ah. And, well, carsales is listed on the ASX. The ticker is car sales. You can access the Australian stock market plus the US and New Zealand markets on the Sharesies. This platform with no investment minimum. Use promo code grow when you sign up to the Sharesies platform for ten points in your account ready to invest. This is not product advice. Make sure you do your own research promo teams and say supply. Now we are going to take a very quick break and we will be right back with Elise Kennedy to discuss where to focus sales from here and what could go wrong if it didn't pan out for car sales. So we'll pick it up straight after this break. We are excited to welcome returning guests to Equity Mates Elise Kennedy to help us talk through all things car sales. So, firstly, L.A.. Welcome. 

Elise: [00:16:57] Thank you for having me. 

Bryce: [00:16:58] So Elise is vice president of research and head of technology research at Jarden and covers car sales. So we're super pumped to get stuck in.

Alec: [00:17:06] Yeah. So at least we've had a look at car sales as a company, but now we really want to turn to it as an investment. And we want to start with how you would go about analysing a company like this, what metrics matter? What are you really looking at? And then are there any that you might hear discussed that you don't think really matter at all?

Elise: [00:17:24] I think the starting point is really around volumes and pricing and what we're seeing in the new and used car market. Sometimes it's harder to get data around the use that we tend to track the new, which tends to be relatively so closely related and that really pushes through the volumes that go through and form the revenue line. The second on the pricing is the ability to put through pricing. Now you don't just think about what price increase if they put it through to use or new cars. It's also about the ability to get pricing perhaps in some of the other forms. So are they looking at other ancillary products like financing or an instant offer? You may have seen that you can sell your car directly. Is that going to be able to generate more profitability? For example, instant offer is around a year of 3 to 4 times. That's another metric within that that we look at. And then most importantly are they going to make money off that? So right now, in this environment with tech stocks, free cash flow is really important. So you want to see how and what EBITDA that drops through. So for example, in Australia you want to be generating really strong margins and returns and any of the new incremental products you don't want to be spending over and above on that. You want to be able to keep growing that margin. And similarly within USP, is are they going to continue that margin expansion and along with investing and growing that business? 

Bryce: [00:18:53] We'd like to turn to the bull case now. And usually we ask, you know, how do these businesses build a sustainable competitive advantage? But car sales have about, what is it, seven times market share of their closest competitor in Australia or thereabouts. So I think we can tick the box that they've built a pretty large sustainable competitive advantage. I guess the question is what where to from here for car sales? What how do they maintain that competitive advantage? What are you looking for this company for? For a bullcase? 

Elise: [00:19:23] That's a great question. So there's a few different parts that we can look at within the business. So I'm going to separate it firstly from what more can they do in Australia and then look at some of the international markets, namely Trader Interactive, probably the biggest delta for them, but also South Korea is also another large opportunity. And then if you really wanted to get your full book, then Latin America. I think that is really 20 year. We might even not be around for that. So let's start with the main thing right in front of us around, you know, the Australian environment because it's a relatively mature market. They've done so well, they own the market here. It's just like an necessary evil when we talk to any of the real estate deal is in some of our industry briefings, they say, you know, they keep on putting price increases, but there's no other option. So I think from a competitive standpoint, we've had so many disruptors come here in Australia from Gumtree to Cars 24 to a few of the others. And I think for us the main thing is not are they going to have a competitor, but what more can they get from the market here? So in your book scenario, they continue to come through with higher depth, higher pricing product that creates a greater pool because with a cut to the profitability margin is where they're taking their dollars from. So that can compare differently to, say, a real estate agent where they're taking it from a vendor, they're taking straight from the gross profit of a car dealer. And now car dealer historically made around 1800 dollars in Australia for each car, and it's moved up to just over $2,000. And so for them it's like, well, how can I create efficiencies for that car dealer where they maybe make 33 grand from that car sale, but I can still type maybe another 100 bucks on from that because that keeps on increasing their price. So that scenario is, as I've mentioned previously, what new products are coming through and what more can they get. So this deal is select where a car dealer can go and find some alternative options to sell that car and make a better profit. This instant offer, as I mentioned, there's all these other things that I would have no idea strategically how to do because that's their expertise. So from my side, we want to see the numbers on it, and that would be a book scenario where they keep. Incoming scream with greater products in there and across other categories of folks, cars, caravans and the other things that you probably don't appreciate this business for. But that's Australia. So keep that dominant position, create new products to keep growing the volumes as well as the price. But the price is probably going to be the bigger lever because volumes are largely captured. So let's turn over to international markets and let's start with Trader Interactive. So over there right now, they've got market share really strong within our base, but the other categories are where their opportunity exists to take on market share, become getting a higher percentage in them. So what we want to see from that as well is around the ability to keep driving price along with the volume because they've got lot more to go within the category and market share gains, but also creating some of the products which they've got here. So all those you said, I said in Australia, you want to create that same playbook over there that's probably not fully captured and where the share price is today, South Korea, it's a bit of a different market as to where and how they sell products them. So it's more of what they call a guaranteed market. They kind of have somebody come in and say it's looks really good, therefore feel comfortable to go and buy it. They're rolling that out across different stores and regions over there, but it's accelerating that and then being able to have that dominant position in that market to be able to keep pushing that price. So it's a combination of two factors there. And then, as I said, if we ever see Latin America go exceptionally well, that would just be an added delta because obviously that's an exceptionally large market, but has some of the challenges in changing and capturing market? Oh, there had got a good market share, but you know, really putting the price labour. 

Alec: [00:23:21] Now Elise, we were talking before the break about the number of Australian tech companies, especially some of those I guess now we say older tech companies really pushing overseas. You've got REA Group, you've got sake, you've got Airtasker, you've got Carsales, they're all they've got dominant Australian positions and they're trying to figure out where they can replicate that overseas. How would you rank Carsales against some of those other Australian tech companies in their efforts to push overseas? 

Elise: [00:23:54] It's really mixed. You know, Latin America, it's been there a very long time, can't really give it much credit there. As I mentioned, South Korea done very well, but it's a different market. As I mentioned, you can't use the exact same playbook as you do in Australia. Trader Active. Trader Interactive is going to be a real test as to how well they're going to be able to replicate it. And there's very early signs they really only integrated this in September of this year. But the early signs around being able to put through price increases of at least 7% except for trucks that's out of category already starting to roll out a new type of leads product or CRM system, which is now $100. You opt out of that, but that again, can get you a yield of 10%. As I mentioned, that price lever is a huge thing. Being able to start doing beta testing of media, it all kind of points towards maybe, yeah, they are going to show their footprint versus some of the other companies, but I think it's still really to be told and to be seen yet. 

Bryce: [00:24:53] So let's turn to the bear case. Elise, what are you most concerned about when you're thinking about car sales and looking at it from an investment opportunity, given the ambitions that it has to get overseas? 

Elise: [00:25:03] Well, I've got the best case scenario in the market. I'm one of the few people who has an underlying on this stock. I know me well enough with all my tech stocks that that's where I do take the view. But here's the scenario which I find still struggling to get conviction. If you go and you look at the cars market over in the U.S., as I mentioned, volumes is a huge component. We've just gone through this period of all of us getting in extra costs, recovered, having the finances to be able to go and deliver a to show the new cars market was challenged in terms of volumes and getting that to come through but that pushed towards the used car market which they actually get better returns and better yield on a better profitability. This is the Australian market, as I said, which is still one of the key things in the scenario of valuation of this name. So for us I think looking forward you've got a softer macro backdrop because the wealth effect, the biggest category that's impacted from that is around the cars and those types of areas. If you're thinking about what's happening with houses, interest rates, inflation, wages, if we get recession coming through, the category is going to get hit hardest. Now, the argument that historically has been put forward by cars is that that will push more flow into the used car market. But if we've just had a really good, strong used car market, how much more volume can you go and get that? And they make their money predominantly from you putting it up online or in the deal aside from leads. And that's a more demand driven. So if we're not there jumping online and looking at the longer term, I question how are you going to be able to sustain this historic. High volumes that's in an Australian business, but that playbook can be put everywhere else. So again, if you go to the U.S., it seems contradictory to me to be able to see all these other downgrades. If you look at it, cars.com or cars, guru cars 24 over in the U.S.. A lot of them have had real strong challenges because of the volumes that are not in that market. And you can't put through price increases if the volumes are at all time lows. And I think it's hard as well to take up some of those new products. If you and I are economically just trying to keep the lights on, are you really going to go and say, oh, let's go and choose some new media product? That's where I am. I feel it's too early. I think about the next six months I'm probably going to be wrong, but they're onwards, I think, on a longer term view. I think there could be risk to the downside. So that's that's my best scenario. [00:27:32][148.2]

Alec: [00:27:32] At least we like to finish these interviews by talking about the longer term view. But I just want to I want to think longer term and think about the Bear case for a second before we talk about what the company sees their long term future. Because when I think about the car market, for me it seems like one of the markets that's in the biggest state of flux we've got, you know, the transition from internal combustion engines to electric vehicles. We've got questions around what the future sales pipeline looks like. You know, do we see the dealership model disrupted and do we say car companies selling directly to consumers like Tesla is trying to sort of pioneer? And then there's all these questions about, you know, the life of a car will be longer if it's an electric vehicle because there won't be as many moving parts and the engine won't be breaking down. It just feels like it's it's a world that's in a state of flux. And when we were researching car sales, we didn't say a lot of commentary about how those like bigger macro trends will affect their business. When you speak to the company or analysts in the industry, is there any talk about how what's going on in the broader car market will affect car sales?

Elise: [00:28:39] It's a great question and one that I think we should really be talking about more often. And that's exactly, as you point out, electric vehicles and the targets that we have here in Australia and internationally to hit some of those. We're going to need to create and have a strong uptake of EVs. And what is the sales model? I know Tesla is always the car that comes to mind, but there's so many new EVs that are coming through now. Investors are that are thinking longer term, is exploring this, but haven't come to conclusions as to what this is and what it's going to do. Now, when we do raise these questions with the company and we also speak with car dealers such as they pay to warrant away pages, some of them are thinking that they should be able to participate in this, assuming it's moderate to market because others are going to be selling their existing cars. It's just a car's in a different form. But I think the fact is we don't really necessarily know that because what happens if your car because of the battery life lasts eight years instead of, say, three years, or you think, actually, because I don't need to regularly go and change my car if it's just a show and it's the system like your iPhone, not D, smash it. And even then you'll probably not get a new one for a while for anything like me with a phone in it I think is a case of we're probably not going to see as much of that volume go in and out. So I think we're in the exploratory phases. But yes, we are thinking long term and these strategic challenges that are quite likely to come through, I don't think it's really at the forefront of some of the companies minds. I think it's stronger when we speak to some of the dealers that have courtyards and how that's going to impact them. But the reason I think as well that we're not thinking about them because of the adoption that was spoken about, the catalyst to driving that. I think for us, you know, if you can't drive in a year in Australia from Sydney to Melbourne or I forget to plug my car in and I think I'll have to go anywhere I think until we come overcome some of those barriers, the reason that perhaps we're not thinking about them. 

Bryce: [00:30:43] Well, with that in mind, let's turn to the longer term outlook for car sales. And if you think about its ambitions, global expansion, where do you expect car sales to be in sort of ten years? Should it be able to execute on on its plan? 

Elise: [00:30:59] So if they can execute their plan and assuming that they're able to play in the space to which they expect that they can, this business is probably going to will have more earnings globally than it will domestically. And that will predominantly come from the US and Trader Interactive because Australia, as I mentioned, might be more challenged and whether or not they make further acquisitions, if they kind of continue to spin off free cash flow, that would be the ideal playbook for them and everything that they do and trial and be able to generate in Australia if you really want to think about. A way that is always debated. Can they decide to make the deal themselves? Can they really start to just go direct to you and I? Everything is done on the used cars hours. Do we really need to have a dealer? That's not necessarily the strategy that they want to play out, but they are the ones that are in the position that if that is something that comes through and is an opportunity, then they're in the best position to be able to do that. So I think that for them it's all about executing on offshore or still generating as much as they can here. And the delivery of that will be their longer term strategy. 

Bryce: [00:32:16] Guys, love it. Well, thank you so much, Elise. I was reminded that car sales is listed on the ASX. The ticker is a creative car. So nice that they got that one. But at least we do appreciate your time as always. Thank you for joining us on Equity Mates for our summer series. And we really do appreciate your time. Thank you very much. 

Elise: [00:32:38] Thank you, as always, for having me. 

Bryce: [00:32:39] And a massive thank you to Sharesies for supporting the Equity Mates Summer Series. You can access the US stock market plus the Australian and New Zealand markets on the Sharesies platform with no investment minimum, you can use the promo code grow when you sign up to the Sharesies platform for ten points in your account ready to invest promo T&Cs apply but Ren will pick it up next week.

Alec: [00:32:58] Sounds good.