Greetings. Welcome to the Carnival Corporation & plc's Second Quarter 2025 Earnings Call. At this time, all participants are in listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Beth Roberts, Senior Vice President, Investor Relations. You, Beth. You may now begin. Thank you.

Good morning, and welcome to our second quarter 2025 earnings conference call. I'm joined today by our CEO, Josh Weinstein, our CFO, David Bernstein, and our Chair, Mickey Arison. Before we begin, please note that some of our remarks on this call will be forward-looking. Therefore, I will refer you to the forward-looking statement in today's press release. All references to ticket prices, yields, and cruise costs without fuel will be in constant currency unless otherwise stated. References to yields will be on a net basis, References to cruise costs without fuel, EBITDA, net income, ROIC, and related statistics for all will be on an adjusted basis unless otherwise stated. All these references are non-GAAP financial measures defined in our earnings press release. A reconciliation to the most directly comparable U.S. GAAP financial measures and other associated disclosures are also contained in our earnings press release and in our investor presentation. Please visit our corporate website where our earnings release and investor presentation can be found. With that, I'd like to turn the call over to Josh.

Thanks, Beth. Before we begin, I'd like to take a moment to address the conflict in The Middle East. The escalation of the past two weeks culminating over the last few days has been swift. While we certainly hope for a quick and peaceful resolution, and it has not yet had any discernible impact on our business, this is all unfolding too quickly in real time to try to project how it could impact our future business. Like many others, we will actively monitor the situation over the coming days and weeks to evaluate its potential effects on our business and provide updates as needed. In the interim, our thoughts and prayers are for the safety of all innocent civilians and for the brave men and women of the US Armed Forces who work tirelessly to protect The United States Of America. Turning to our business. Another quarter on the books and another set of phenomenal results. This marks eight quarters in a row we have achieved record revenues on record yields. We also hit new second quarter highs for EBITDA and operating income, both in total and on a per ALBD basis, while customer deposits also reached an all-time high. Year over year, EBITDA was up 26%, operating income increased by 67%, and net income more than tripled as we continue to benefit from our focus on commercial execution. Net income came in $185 million better than guidance as we outperformed across the board. Yields grew by almost 6.5% beating our guidance by 200 basis points. Both ticket and onboard equally outperformed on very strong closing demand reaffirming the strength of our consumer. Unit costs also came in 200 basis points better than expected on timing between the quarters. This was yet another quarter with EBITDA margins up significantly…

Thank you, Josh. I'll start today with a summary of our 2025 second quarter results. Next, I'll provide some color on our improved full-year June guidance as well as some key insights on our third-quarter guidance. I will also explain the financial impact of Carnival Cruise Lines' exciting new loyalty program, Carnival Rewards for 2026 and beyond. And then finish up with an update on our efforts to rebuild our financial fortress through refinancing and deleveraging. Turning to the summary of our second quarter results. Net income exceeded March guidance by $185 million as we outperformed once again achieving our highest ever second-quarter operating results. The outperformance was essentially driven by five things. First, favorability in revenue worth $84 million as yields came in up over 6.4% compared to the prior year and that was on top of last year's robust 12% increase. This was 200 basis points better than March guidance driven by close-in strength in ticket prices and continued strong onboard spending. The yield increase was a result of improvements on both sides of the Atlantic. The improvement in ticket prices was across all core programs. The improvement in onboard spending was broad-based. As all major categories of spending were meaningfully higher. Second, cruise costs without fuel per available lower birthday ALBD were up 3.5% compared to the prior year. This was also 200 basis points better than March guidance and was worth $56 million. The favorability in costs was driven by the timing of expenses between the quarters. Third, favorability in fuel consumption and fuel mix was worth $18 million as our efforts and investments to continuously improve the energy efficiency of our operations, leveraging technology and best practices paid off once again. Fourth, interest income and expense favorability of $8 million was driven by higher interest…

Thank you. We'll now be conducting a question and answer session. If you like to ask a question, please press 1 on your telephone keypad. And a confirmation tone will indicate your line is in question queue. May press 2 if you like to withdraw your question from the queue. It may be necessary to pick up the handset before pressing the star keys. To allow for as many questions as possible, we ask that you limit yourselves to one question and one follow-up. Thank you. One moment, please, while we poll for questions. Our first question is from the line of Matthew Boss with JPMorgan.

Great. Thanks, and congrats on the phenomenal quarter. So Josh, maybe could you speak to improvements in product and experience so far that you think is translating to today's above plan pricing and onboard spend? And maybe how best to think about the incremental opportunity that may be tied to the laundry list of additional drivers you cited you talked about continued fleet improvements. You talked about, the launch of Private Islands X this year and also loyalty. So maybe the incremental opportunity or maybe where we stand in terms of innings relative to what you've already done.

Sure. You know, we've been talking about this for a few years now at this point. You know, really, when we look at what the teams have done across the commercial space, they've been making, you know, step-by-step improvements, in pretty much all areas. Of the business. And when it comes to onboard experience, and product, that's the one I've always talked about the least. In this context because they're always on their game. Right? Nothing is gonna be, from my perspective, about recreation Really, it's going to be about innovation step by step, responding to the guests' that they are targeting. And it's small incremental things that make us you know, have this improved profile on board every single quarter. I get I you know, they're they're not necessarily exciting in in the eyes of of lots of folks, but the way that Holland America for example, understands its guests really leaning into the concept of fresh seafood as an integral part of their cruise experience and being able to source locally fresh and and be able to champion that, and make that part of the experience. Little things like that go a long way, all of our brands do that all the time. Now on top of that, we obviously do take opportunities to make some investments in the assets themselves, which talked about IEDA Evolution. And as you heard me talk about in my notes, it's exceeded our expectations when it comes to the returns that it's generating. So this is business as usual as far as I'm concerned, and that will continue well into the future. As far as, you know, looking forward, I you know, I'd say we're we're still in the early innings. Right? Celebration key doesn't exist yet. We have another month before that happens. And and there's lots more in the pipeline, some of which we've already talked about, other things we've not which doesn't mean it's huge incremental investments size of of Celebration Key, but things that we can do to make our our experiences and products on the land side even better. We look forward to talking about the over time.

Great. And then maybe, Josh, on the bottom line, how best to think about the margin opportunity, which I think you cited as so much more from here with the last two quarters now exceeding 2019. And I think you've made it clear that you don't see 2019 as a as a ceiling.

Right. No. I mean, highest in twenty years. Right? So we feel good about that trajectory. From from our perspective, it's maintaining our our low-cost industry leadership status while continuing to focus on driving incremental revenue. I mean, it is as simple as that. I mean, incremental revenue is flowing to the bottom line. That's exactly where the teams have been focused. And we can do both. We can shoot them and walk. We can manage our costs and increase revenue. Is what you've been seeing.

Great color. Best of luck.

Thanks, Matt.

Next questions are from the line of Ben Chaiken with Mizuho Securities. Please proceed with your questions.

Hey, good morning. Thanks for taking my questions. Maybe you could provide some color on pricing for Celebration Key itineraries. Is this asset getting a premium today? Or is it too early? And then related, what plans do you have to market the destination? Like do anticipate putting marketing dollars behind the project or will this stay more word-of-mouth for the time being? And then one follow-up. Thanks.

Alright, sir. Good morning, Ben. So we are seeing a premium. It's in line with what our expectations were. So everything's proceeding exactly as we had anticipated, it to be with respect to marketing dollars, you know, we have been. We have been putting marketing dollars and shifting marketing dollars, to really lean into Celebration Key, and I think that's why it's one of the most sought-after destinations even though it it it doesn't doesn't take people yet. And we need one more month before that happens. So there's more to come on that, and there's more that we'll be doing in shifting the marketing spend so that we can leverage the same type of enthusiasm for the other things that we've got in the works, like the for Relax Away. Which is gonna be another wind at our backs, so to speak, as we get into 2020 and beyond.

Got it. I guess I guess the essence of the marketing question was just that I would imagine it's difficult to market it too much prior to there being bodies there, but but totally appreciate kinda where you're coming from. Then on the on the loyalty program announcement, is this potentially a gateway to more of a book direct push? Or is it more about people just keeping customers in the network Curious how you think about the Obviously, David walked us through some of the yield impacts over the next couple of years. Thanks.

Sure. Sure. No. Definitely not, a push to go more direct. Bookings with our travel agents will get the same benefit. For for the guest and for the for the trade that they always would. So we think that this is a great avenue for increasing business and loyalty and engagement, not only directly with us, but but through our valuable trade partners as well. Got it. Thank you. Thanks.

Next questions are from the line of Steve Wieczynski with Stifel. Please proceed with your questions.

Yes. Hey, guys. Good morning. And congrats, Josh, on the second quarter and outlook here. So Josh, since we heard from you guys back in March, obviously, there's a lot you know, that's been going on out in the world. But but maybe wondering if, you know, you can kinda walk us through kinda how those last three months look from a from a booking perspective. Just yeah. I think what we're trying to figure out here, whether were there there stronger months versus softer months or have bookings been pretty much status quo status quo across geographies and sourcing? Maybe also wondering how bookings have looked more recently with all the noise out in the marketplace around Iran, Israel, all that stuff you noted in your prepared remarks?

Sure. Good morning, Steve. So, yeah, no, we definitely saw, more volatility in the month of April. That's probably should not be expected. That's a good dip versus where we were, in the trajectory in March. But May nicely better than April and the first couple of weeks June, nicely better than May. So, you know, we'll you know, we'll we'll keep responding. Appropriate to a very tricky environment.

Okay. Gotcha. And then, Josh, as we think about the back half of the year, I mean, I think in your presentation, said you're you're 93% booked for for 02/2025. And if we think about, you know, you you guys have actually you know, you've exceeded your first and second quarter guidance. And you know, that was pretty much driven by stronger close in pricing and onboard trends. So Josh, I guess I'm guessing as we think about the last two quarters, should we be thinking that they're probably won't be as much potential upside to your revised guidance given you know, not as much close in pricing is left and then the real driver of yield outperformance for the last six months is essentially just the onboard spend. Is that kind of the right way to think about the next two quarters?

Well, I I mean, I'll I'll think I'll answer maybe at a little bit of a higher level, which is I think it's fair to say, you know, the upside that we thought we have in December for the back half of the year is is not is not at the same place. And hopefully, people would expect that because the world over the last five, six months, has taken some terms and turns that nobody expected. And as we talked about before, in the grand scheme of things, a lot of times what happens is there's just there's just a reflection for a lot of consumers about what does this mean for me? Internalizing it, figuring it out, and then moving forward with their plans. And that's that's all well and good, and that's part of the process when these types of things occur. The issue is, you know, there's just been a lot in the first half. A lot of those points in time. And I think the team's been doing an amazing job of delivering not only the actuals that you see in the first couple of quarters, but just continuing to figure out how to navigate the yield curve and how we manage our revenue. In this environment. So definitely not saying there's not upside. We're always gonna strive to meet and exceed guidance, but No. Definitely not the same, same view of the upside as we had in December.

Okay. Thanks, Josh. Appreciate it.

Next questions are from the line of Robin Farley with UBS. Please proceed with your question.

Great. Yeah. Sort of similarly thinking about the second half of the year. Can you characterize a little bit how demand for Europe is in Q3? And then just thinking about I totally understand your comments about what's going on in the world impacting bookings. Also, seems like you maybe have less left to sell anyway, for for the second half. But in terms of onboard revenues, that's a little bit closer in. It seems like that came in well. Despite kind of volatility and geopolitical events that people were still spending when they got on board. So does it seem reasonable that the onboard piece that there's maybe some upside potential in the second half from that? And perfectly understand you may not want to bake it into your guidance today, but it it sounds like the onboard spend did kind of continue through the period of volatility. Is that just trying to characterize that? Thanks.

Good morning, Robin. How are you? We clearly said one question and a follow-up. But since it's you, so Europe Q3 is looking great. So nothing but good things to talk about there. With respect to onboard, I say we outperformed as David I think said in his notes or maybe I did. Can't even remember David. We outperformed on both the passenger revenue and the onboard. And the onboard was really quite strong throughout the month of throughout the quarter. And so far, what we've seen in the first couple of weeks June is that's continued. The yield guidance that we gave is is based on, you know, what we wanna be able to achieve on both the ticket and the onboard side. So it's it's in there. I said, we always wanna out outperform, but, but that's the guidance that we've given.

Okay. Great. Thank you. And I guess that I already have my So maybe just one. David, very fair. Thank you, Rob. But just if if I could just mention one Oh, wait. Are you there? Okay. Alright. Alright. Alright. Go ahead. No. No. No. No. Not a question. Just a suggestion that when David just talking about the impact of the rewards program next year, just that maybe next year in the first year of the program, it might be helpful for all of us if you kind of break out what the yield would have been if under the old accounting, just so we can see whether it's if it's 50 basis points, it's more. If it's less, Just that might be helpful in in the first year. So just one just that thought. No no follow-up question. Thanks.

Yeah. Happy to do that when the time comes in the back half of '26.

Thank you. The next questions are from the line of Brent Montour with Barclays.

Good morning, everybody. Congrats on the quarter. First question is on the consumer, Josh. The lower income consumer we're seeing some struggle in that segment across other travel verticals. But we've seen that for the last two two years and you guys have done really well throughout that. I just I want to get your thoughts on geopolitical events aside, if that consumer feels different today, right now, this year, first half, whatever you want to kind of talk about versus last year or the year before, if you think you can kind of keep sort of knocking the ball off the cover with that consumer if that's if they're sort of accumulating a struggle, that's going to start showing up.

Sure. So we haven't seen anything really showing us a differentiation in patterns between the the lower end consumer and and those that are looking for the premium or even the luxury. So nothing in particular to speak of. You know, I I go back to what I've what I've said a lot, which a lot of people say is, we are a incredibly stupid value when it comes to the alternatives. And and when people are looking to take vacation because they do, we hold up really, really well. And the lower down you come in income, the more important that becomes. Because they have to make their dollars really earned earned on their vacation. And that's what we try to do for for everybody.

Okay. Thanks for that. And then just a a second or another ago at the second half here. Just looking at the implied guidance in the cadence, does look like the fourth quarter implied guide is higher than the third quarter. We know that and the third quarter is obviously below the last couple of quarters run rate growth. And so if Europe is not softer or there's anything to say there then is it fair to say that the fourth quarter just has a sequential lift implied from the ramp up of the island? Or is there sort of anything else in there that we could maybe highlight?

Yeah, certainly Celebration Key is helpful in our portfolio, so we're happy about that. You know, but taking a step back from percentages, when you look at actual dollars, the increases that we're forecasting because Q3 is seasonally higher as a base they're each $8 higher. Year over year.

Okay. Great. Thanks for that, guys. Congrats again on the quarter.

Thanks.

The next question is from the line of James Hardiman with Citi. Please proceed with your question.

Hey. Good morning. Thanks for taking my call, and obviously congrats on another strong quarter here. So Josh, you talked about a little bit of weakness in April followed by a pickup in from April to May and then from May to June. I wanted to sort of connect that to the booking commentary for 2026. I think I think coming out of Q1, we were ahead in terms of bookings and we're in line now Should the narrative ultimately be that that you saw a little bit of a lull in booking demand, but that you held strong on pricing throughout. Just given the fact that you've got a lot of time, obviously, to to to fill out that order book Or maybe I'm connecting dots that shouldn't be connected Thanks.

Yeah. No. I think yeah. Good morning, Jeff. Generally, I I would excuse me. I agree. We don't have to panic and we don't have to do silly things. Know, volatility comes and it goes. And and our like I said, our our teams are managing managing the curve and trying to do the right things and staying ahead of ahead of the game.

Got it. That's helpful. And then, I mean, you talked about up top how it's it's way too early to really anticipate sort sort of the Middle East conflict and how it might impact your business. But just based on where things are happening. Right? This this isn't new, at least in in terms of having to take you know, that part of the world off the board, right, going back to the Israel Gaza conflict you anticipate where we sit today having to to to meaningfully change any itinerary.

Yeah. Crystal balls are nice, but, know, we we really only have a couple of ships, at the very end of this year and for winter, a few months into 2026, that potentially have their itineraries impacting, and that's because they they go and base themselves out of Dubai. And we're obviously we we have mitigation plans, we're looking at this, we'll make the right decision at the right time. But, you know, we already avoid the Red Sea, as you know. So know? And when it comes to things like world cruises and exotic cruises, we really have no exposure in this area. Through the end of 2026. So, you know, we'll save be paramount, and it always is. So we'll we'll make the right decision as we understand the lay of the land looks like.

Got it. That's helpful. Thanks, Josh.

Thanks, James.

The next question comes from the line of Connor Cunningham with Melius Research. Please proceed with your questions.

Hi, everyone. Thank you. Just on on the the 3Q cost guide, there's a couple things in there that I wanted to understand a little better. I think you talked a little bit I think you talked about 200 basis points of timing related stuff that shifted from 2Q to 3Q. And then you mentioned Celebration Key. Could you just you know, give a number on Celebration Key, what that headwind is? And I'm just trying to it's more of for her 26 as that kind of normalizes throughout the, as a mature and whatnot. Thank you.

Sure. So the the four factors that I included was about half of the increase and the total increase is 7%. Celebration Key, I had mentioned, was about zero five point impact for the full year. So it's about a full point for the back half of the year in each of the third and the fourth quarter. I didn't say it was 200 basis points for the onetime benefits from last year. It's just that we had mentioned it, but it's it's about a point in the third quarter for that particular item. So a point for celebration key, a point for the onetime benefit, and the advertising and the the lower capacity was probably worth, between the two, a little over a point.

Okay. Helpful. And then just on loyalty, don't know how much you wanna talk about this, but you you mentioned the airlines and how they've benefited from that. When when those companies talk about it, they talk a lot about the marketing component related to the credit card. You know, agreements that they have as well that are tied to it. I mean, I think you extended your credit card relationship with Barclays in 2022. When does that expire? And just if do you have any details around how many people actually have the card to the.

I'm sorry. You said You broke up. I'm sorry. You you you wanna know how it ties to the credit card? Is that is that the question? Yeah. Yeah. Yeah. So, basically, you mentioned the airlines, and I'm just trying to make the parallel because Yeah. They talk I mean, the numbers there are huge. And so just like how many people actually have the card? What percentage of you know, marketing revenue do you of your overall revenue you get from the marketing component from the credit card? Just any any details there, I think, would be really helpful. Thank you.

Okay. Got it. So I'd rather not give specifics just from a competitive standpoint, but I would say that, the existing program that we have for loyalty is disassociated with our co-branded credit card from Carnival, and our several of our other brands have the same thing. And that's a very successful program in and of itself. The benefit of the new program, or one of the benefits is there's a distinct tie between the two, which does not mean you need a credit card. A Carnival credit card, to be able to enjoy being part of the loyalty program. But having the card will supercharge your ability to generate points, generate status, and we'll be talking more about that by the time we get to the end of the year just from consumer standpoint about exactly how all of it will work But we we the the card is a is a is a great great part of this, and so the the card will be part of this for the foreseeable future.

Okay. Appreciate it. Thank you.

The next questions are from the line of David Katz with Jefferies. Please proceed with your questions.

Thanks for taking my question. I wanted to just dig a little deeper on the ship sale. You don't mind. I I see I think you've given us the gain, but not sort of what the amount or any color around a multiple on what that would be. And, you know, any thoughts around you know, that strategically. And, you know, do you look at these as sort of a recycling exercise know, that could potentially grow over time?

Yes. So we had sold the pasta for a tuna. And we announced that in the second quarter. And then the first quarter was this ship that was sold. We talked about both. You know, previously. In in the case of the cost of fortune, I mean, we have sold many ships over time. And this is really just in the normal course of revitalization of our fleet as we move forward. Over time since ships do get older, we we will sell them to, other parties. We do not feel that those parties come back to compete against us because they are generally in in different marketplaces. With different brands.

Understood. And these are opportunities are opportunities opportunistic. Yeah. I'm sorry. These are it was opportunistic. People came to us looking for shifts and gave us prices that we thought is the best long-term interest of the company. And so we made the decision. It doesn't impact cost as capacity when it comes to its main markets of Europe it's gonna be taking the one shift that it had that was doing a lot of charter business in in Asia and Korea and Taiwan and Japan, and we're gonna be moving that back to Europe. Which is slightly bigger. It's actually gonna be increasing its capacity in Europe, which is a great time for for Costa as well.

Understood. Sorry for cutting in. But I wanted to see if we might be able to get some color on the multiples. Or evaluations or, you know, any perspective at all on what those ships sold for? Thanks.

Well, it was it was nicely overbooked value. And we'll just leave it at that.

Okey doke. Nice quarter.

Thanks, Dave.

Our next question is from the line of Sharon Zackfia with William Blair. Please proceed with your question.

Hi. Good morning. Thanks for taking the question. I to ask more about the loyalty program. So I understand the deferral of revenue, but I'm also curious. It seems as if this would also kind of goose onboard spending quite a bit if if passengers are getting rewarded for total spend. So how do we think about kind of a partial offset there in terms of onboard spend potentially accelerating? And will passengers actually have kind of real-time tracking of their spending onboard? Towards points? And how are you gonna use data to kind facilitate all of that onboard?

Yeah. So that's a great question. So as far as will it cannibalize onboard spending, no. The answer is no. We do not believe that that would be okay. Thought maybe it would boost onboard spending. Yeah. So, you know, we think the engagement and the ability to earn points, through spend is a is a great thing. So, you know, kinda like Celebration Key. This doesn't start for a year. So we'll talk a lot more once the program is in place, and we can talk about what it is that we're seeing. But the whole goal of this, look, at the end of the day, Carnival Cruise Line is an incredibly successful brand that's got a great base of loyal guests, and so much so that it's just hard It's hard to be able to to provide operationally all the things that we'd like to provide because there's just too many folks with the loyalty tiers on our ships. And that's that's a that's a good problem to have, but it is a problem. We wanna make sure that we're delivering great experiences our loyal guests. This is a way to be able to address that, stay engaged with our guests, and hopefully they'll see the benefits as the program gets rolled out and really lean into it.

Can I ask a follow-up, Josh? I think about a year ago, you talked about about 35% of onboard being prebooked. Can can you give us an update on where that stands today?

Yeah. It's more or less the same. It's a little bit higher. But it's more or less there. We don't you know, and I've said this before, we don't have a we don't have a particular target in mind. What we're looking to do is provide our guests with lots of different ways and alternatives to be able to spend on their vacation with us. And we're doing that through bundles. We're doing that through packages. We're doing that through targeted offers. And, of course, spending onboard in real time while you're there. So, as long as we keep seeing progress, it's obviously all flowing into the onboard spending numbers that we talk about and report on, which are consistently going up quarter over quarter, and we expect that to continue.

K. Great. Thank you.

Next questions are from the line of Gianlucao with BNP Paribas. Please proceed with your question.

Hi. Thanks for the question. I wanted to ask a little bit more about Away and Hila Tropical. I think Half Moon had about 900,000 visitors in Mahogany Bay about 500. Thousand previously. Can you talk about maybe the opportunity you see for those islands and how big they could get? With the expansion? Sure. Well, with respect to sure. With respect to Relapse Away, the output can be significantly higher. Than the $900,000 It can certainly double and more. Because in today's world, there's one shift that tenders, and that's pretty much the extent of the operations. And we're gonna be able to birth two shifts and still have the ability to tender in the existing location. And because we're building up the infrastructure on the island, we feel good that we can still accommodate those folks and have them enjoy an amazing experience as you heard me talk about. In my notes at the beginning of this call. With respect to Isla Tropical, we're going be able to enhance the experience there. We're not talking about doing anything on the marine side to be able to accommodate more ships, but we can accommodate two ships at a time. So we feel real good that we'll have the ability to to maximize, that that destination as well over time. I don't have a number for you on the Tropical, but I'm sure we'll be able to talk more about that as we get those developments where we want them to be.

Great. Thanks so much, and good luck.

Thank you. We have time for, one more, Robert.

Thank you. That does be coming from the line of Chris Sesopoulos with Susquehanna. Please proceed with your questions.

Good morning, everyone. Thanks for getting me in here. I'll keep it to one. Josh, you know, we we've spoken in the past on the the loyalty program. Obviously, it is a a big piece of the the story with respect to airlines. Wanna understand why they change now you know, was this contemplated back at your Investor Day? I think it was two years ago. And and feedback so far. And then part b, David, the half point impact for next year, any color that you can give with respect to what's assumed with acquisitions and existing users? Thanks.

So with respect to the loyalty program, no, it wasn't something that we two years ago, were were kind of focused on. It was wasn't focused on it. So I guess that's the answer to the question. Yeah. And the half a point really just comes from the fact that once the program starts, we do have to initially defer a portion of the ticket price that's associated with the benefits that people will earn. From the program. So, you know, there's as I said, they we don't expect incremental costs associated with the new program versus the existing program. And it's just a deferral. Because, initially, when this first starts, you're not going to see the of any benefits immediately. And, therefore, you're not getting revenue from the redemption. So it'll take some time for it normalize itself as I indicated.

Okay. Thank you.

K. So I'll just say, you everybody for joining us for another, earnings call. And from my team, I'd say, take a bow. Congratulations on exceeding SeaChange targets eighteen months in advance. That is an amazing job. Well done.

This concludes today's teleconference. May disconnect your lines at this time. Thank you for your participation.