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Hasbro, Inc. (NASDAQ:HAS)Q4 2018 Earnings Conference CallFeb. 08, 2019, 8:30 a.m. ET
Contents: Prepared Remarks Questions and Answers Call Participants Prepared Remarks:
Operator
Good morning, and welcome to the Hasbro Fourth Quarter and Full Year 2018 Earnings Conference Call. At this time, all parties will be in listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press *0 on your telephone keypad. Today's conference is being recorded. If you have any objections, you may disconnect at this time.
At this time I'd like to turn the call over to Miss Debbie Hancock, Senior Vice President of Investor Relations. Please go ahead.
Debbie Hancock -- Senior Vice President of Investor Relations
Thank you, and good morning, everyone. Joining me this morning are Brian Goldner, Hasbro's Chairman and Chief Executive Officer, and Deb Thomas, Hasbro's Chief Financial Officer.
Today we will begin with Brian and Deb providing commentary on the company's performance, and then we will take your questions. Our earnings release was issued this morning and is available on our investor website. Additionally, presentation slides containing information covered in today's earnings release and call are also available on our investor website.
The press release and presentation include information regarding non-GAAP adjustments and non-GAAP financial measures. Our call today will discuss certain adjusted measures, which exclude these non-GAAP adjustments. A reconciliation of GAAP to non-GAAP measures is included in the release and presentation. Please note that whenever we discuss earnings per share or EPS we are referring to earnings per diluted share.
Before we begin I would like to remind you that during this call and the question/answer session that follows, members of Hasbro management may make forward-looking statements concerning managements' expectations, goals, objectives, and similar matters. There are many factors that could cause actual results or events to differ materially from the anticipated results or other expectations expressed in these forward-looking statements. Some of those factors are set forth in our annual report on form 10K, our most recent 10Q, in today's press release, and in our other public disclosures. We undertake no obligation to update any forward-looking statements made today to reflect events or circumstances occurring after the date of this call.
I would now like to introduce Brian Goldner. Brian?
Brian Goldner -- Chairman of the Board and Chief Executive Officer
Thank you, Debbie. Good morning, everyone, and thank you for joining us today. Informed by our proprietary global consumer insight and industry-leading brand-building capabilities, Hasbro's global teams worked to do more than just respond to a very disruptive market last year. In 2018, our teams actively managed through the year but also took strategic steps to drive long-term success in a rapidly changing environment.
Over the course of a 12 month period, we reimagined and redesigned our go-to market strategy and reshaped our organization to become a more agile, modern, and digitally driven play and entertainment company. We meaningfully diversified our retail mix and grew online point-of-sale double digits, absent the impact of Toys-R-Us. We pivoted to a digital first approach, making Hasbro a complete e-com partner. As a result, according to edge market share, Hasbro was the No. 1 toy and game company on Amazon in the US and Canada.
We streamlined and focused our teams, cutting cost across the business. We identified greater savings than originally anticipated and now expect $70 to $80 million in gross savings by 2020 from our organizational actions. $50 to $55 million of these savings are expected this year after we reinvest.
We further diversified our global sourcing efforts, reducing our risk and better managing our cost. We are on track to lower our Chinese manufacturing to 60% of total by the end of 2020.
We invested in developing innovation across brands, price points, and channels. We look forward to sharing many of these with you at Toy Fair. We purchased Power Rangers, adding a new entertainment brand to our global portfolio. We couldn't be more excited with how our original television series and line looks for 2019, and our retailers share our excitement.
We grew Magic: The Gathering revenues behind positive tabletop performance as well as the move to open beta for our new digital initiative Magic: The Gathering Arena. Arena is poised for a successful launch this year, including a major new e-sports initiative. We are investing and innovating to make gaming a greater growth driver for Hasbro over the short and long term. You'll hear more about our plans at our investor event next week.
We successfully reengaged families, kids, and fans in the Transformers franchise with our feature film Bumblebee and our charting a path forward across the blueprint in entertainment, gaming, publishing, and merchandise for this valuable franchise. And we returned $559 million of excess cash to you, our shareholders, through our dividend and share repurchase. Today we announced the board increased our quarterly dividend 8% to $0.68 per share. This represents the 15th dividend increase in 16 years.
While the 2018 industry headline was a major retailer bankruptcy, this event created a ripple, which went deeper and magnified the impact of ongoing underlying changes in the industry, including the rapid growth of online retail globally and a heightened focus by retailers on profit and inventory management. For Hasbro, in addition to losing hundreds of millions of dollars in revenue from Toys-R-Us, the liquidation of an additional hundreds of millions of dollars of their retail inventory, sold into the market at large discounts, was more impactful to 2018 than we and industry experts estimated. It is an unprecedented yet finite event.
Prior to its initial bankruptcy filing, Toys-R-Us was our third largest customer in the US and our second largest customer in Europe and Asia-Pacific. In Europe, its bankruptcy added to a market already dealing with the disintermediation across retail by online and omni-channel retailers, as well as political and economic headwinds, notably in the UK. According to NPD, the European toy and game market declined 4% last year across the top six markets.
As we discussed at the start of 2018, even before the European Toys-R-Us bankruptcy, reducing our European retail inventory was the top priority for our teams. Given the dynamic retail environment, it was a bigger negative impact than initially expected to both our topline and operating profit as the team executed this task. Retailers ended the year with significantly lower inventory, down approximately 27%. Our goal is to stabilize Europe this year and grow beyond 2019.
In the US mass market retailers capitalized on the share opportunity in the toy and game category, but importantly also increased their focus on inventory management, implementing new behaviors and technologies this past holiday season. They ended the year with less Hasbro retail inventory than prior years. This is a trend we anticipate continuing.
Including the loss of Toys-R-Us, Hasbro's US retail inventories were down approximately 24% last year. Point of sale in the US and Canada, excluding Toys-R-Us, increased for the year and in the fourth quarter.
For the full year, Hasbro's revenues declined 12% to $4.6 billion, including a 13% decline in the fourth quarter. Several brands delivered positive performances. Franchise brands Monopoly and Magic: The Gathering both grew revenues last year. Dungeons & Dragons delivered another record year within our gaming portfolio. Our plans for an expanded universe of gaming behind D&D is taking shape in analogue and digital gameplay.
Our new collectibles lines, Lost Kitties and Yellies, along with Power Rangers licensing revenue in the second half of the year, contributed to growth in emerging brands. Global point of sale for franchise brands, emerging brands, and our gaming category, including Monopoly, was up for the year and the fourth quarter, excluding Toys-R-Us, in both periods.
Given their strong representation at Toys-R-Us, certain brands and categories were disproportionately impacted by its bankruptcy and liquidation. Nerf is one example of a brand that, due to its performance and innovation, received larger shelf space at the retailer. In addition, increased competition, principally at lower price points, contributed to a decline in Nerf revenues last year. Nerf remains by far the industry leader, and we are building on Hasbro's long-standing reputation for innovation, performance, accuracy, and safety, beginning with our new gamer series, Nerf Fortnite and Nerf Overwatch. We are entering a new innovation cycle for the brand that will deliver compelling product across price points in 2019, 2020, and beyond. We'll share more about our plans at Toy Fair, but given the competitive nature of the industry we will be waiting to share some initiatives and plans closer to their launch dates.
Within partner brands, Hasbro's Marvel portfolio and Beyblade delivered very strong performances behind innovative product and great entertainment. After an outstanding box office and merchandise year, Marvel's 2019 theatrical lineup is impressive and includes a diverse portfolio led by Marvel Studio's Captain Marvel in March and Avengers: Endgame in April, as well as Columbia Picture's Spiderman: Far From Home in July. These strong partner brand performances were offset by declines in Star Wars, Disney Princess, Frozen, and Trolls, each of which has significant new entertainment for 2019 or 2020.
The Walt Disney Company continues to set the standard for tremendous stories with highly merchandisable content, and 2019 is poised to be another amazing year. In addition to the robust Marvel slate, Hasbro will be delivering innovation in marketing programs to engage kids and fans in the Star Wars franchise throughout the year. Coming soon for the franchise is The Mandalorian, an all-new live action television series from executive producer John Favreau on Disney's upcoming streaming service, Disney+, the opening of a major new theme park land, Galaxy's Edge, in both Anaheim and Orlando, and Star Wars Episode IX, which debuts in theaters December of this year, with its impact reaching across both 2019 and 2020.
The Disney Princess franchise will benefit from new entertainment, including the live action Aladdin in theaters this May. The highly anticipated theatrical release Disney Animation's Frozen 2 is set to debut Thanksgiving 2019 and will be a factor in both 2019 and 2020. Hasbro is supporting the film with a complete line of fashion and small dolls, playsets, castles, Play Doh products, and games. In addition, Trolls will release all-new theatrical entertainment in 2020.
Throughout 2018, the Hasbro team worked in real time to use our industry-leading capabilities as well as adding new capabilities to drive share recapture from the Toys-R-Us bankruptcy and liquidation. While in the short term we didn't achieve all the share recapture we were driving for given the higher than anticipated impact from the Toys-R-Us stores' liquidation, we did create share shifts and new channel opportunities that will benefit us in 2019 and beyond. Importantly, by lowering retail inventories and having tremendous new brand initiatives, we have laid the groundwork that will enable us to stabilize Europe while making plans to return Hasbro to growth this year.
Our growth plan is multifaceted and is based on our ability to grow our brands, deliver compelling new gaming experiences across all formats, create engaging entertainment, and expand our consumer products while fueling our digital commerce with digital marketing, leveraging a right-sized expense model. As a result, we are well-positioned to grow Hasbro this year and beyond.
Next week at Toy Fair, Deb, John, and our amazing teams will dive deeper into our plans and brand initiatives. We hope you will join us. I'd now like to turn the call over to Deb. Deb?
Deb Thomas -- Executive Vice President and Chief Financial Officer
Thank you, Brian, and good morning, everyone. Following several years of growing Hasbro's revenues and earnings, our global teams faced significant challenges in 2018. According to NPD, the toy industry declined for the first time since 2009, decreasing 2% across the G11 markets for the year and 6% in the fourth quarter. The bankruptcy of Toys-R-Us was the most impactful event to our business. In addition, several other retailers around the world closed their doors, and, as Brian spoke to, several implemented new approaches to managing inventory, which decreased their late fourth quarter reorder levels versus historical patterns.
In Europe throughout the year, our teams diligently lowered retail inventory levels to reposition the business going forward. This European activity meaningfully impacted the revenue and profitability of our international segment and was nearly as impactful as Toys-R-Us to our overall business.
Our investments in brand, gaming, and content drove growth in higher margin initiatives, including Monopoly, Magic: The Gathering, Dungeons & Dragons, and entertainment and licensing. We continue to invest to expand our portfolio across channels and categories.
We are taking steps to right-size our expense base and align behind our highest priority initiatives. As discussed earlier and detailed in the reconciliations to the earnings release, we incurred certain charges in 2018 related to organizational changes, the Toys-R-Us bankruptcy, and asset impairments, which totaled $267 million. Excluding these charges, operating profit margin was 13.1%. Lower revenues coupled with higher cost to clear inventory were the primary drivers of the decline.
We reduced operating expenses but lost leverage. Most of the savings from our actions will be delivered in 2019 and beyond, and we will begin to drive increases in our operating profit margin. Our cash generation is in line with our targets, and we ended with $1.2 billion in cash. During the year, we returned $559.4 million to our shareholders, an increase of approximately $131 million versus the prior year, and the board voted to increase the quarterly dividend 8% this year.
Investing in the business remains our top capital priority. We made important investments last year in brand innovation and acquisition, digital gaming capabilities, organizational change and talent, storytelling, and content capabilities, as well as in our supply chain, all to drive long-term profitable growth.
Within our segments, the US and Canada segment revenues declined 10% for the year and 9% in the fourth quarter. The segment was negatively impacted by the loss of Toys-R-Us revenues, the impact of its liquidation on the US market, and by retailer efforts to more tightly manage inventory this holiday season.
Our revenues across brand portfolio categories declined. Excluding Toys-R-Us, point of sale increased for the year and across all four brand portfolio categories, including franchise brands, partner brands, Hasbro gaming, and emerging brands. Between the loss of Toys-R-Us and the steps mass market retailers took to manage inventory during the holiday, retail inventories are down significantly at year end.
Operating profit in the US and Canada segment declined 25% as reported. Adjusted segment operating profit, excluding the $46 million of Toys-R-Us related charges, declined 16%, and represented 17.6% of revenues versus 19% in 2017. Lower revenues drove the decline, along with a higher mix of closeout sales in the year.
International segment revenues declined 17%, including an unfavorable $41.7 million impact of foreign exchange. On a constant currency basis, full-year revenues declined in Europe and Asia-Pacific but were flat in Latin America. Emerging brand revenues increased, but the remaining three brand portfolio categories declined. Europe revenues declined 24% for the year, or $335 million. $9 million of the decline was related to foreign exchange.
Our efforts to clear retail inventory and the bankruptcy of several toy specialty retailers last year were the primary factors in the decline. Toys-R-Us was most impactful, but Ludendo in France and Top Toy in the Nordics also closed. While we expect continued consumer and retailer challenges in Europe, our goal is to stabilize the business in 2019, positioning it to return to growth in future years.
In Latin America, revenues declined 6%, including a negative $31.2 million impact of foreign exchange. Excluding the currency impact, the region was flat year-over-year, led by revenue gains in Mexico. Point of sale increased for the region despite ongoing political and economic instability.
Asia-Pacific revenues were down 5%, including a $1.6 million negative foreign exchange impact. Australia's decline was most impactful to the region, as it was hurt by the closing of Toys-R-Us as well as retailers' inventory management. Revenue increased across the Asian countries, led by our new office in India. China was flat year-over-year despite a tough comparison with 2017's Transformers: The Last Knight movie merchandise. After premiering last month, Bumblebee has earned over a $167 million at the Chinese box office.
Within Europe and Latin America, macroeconomic factors and retailer health continue to impact our decisions around extending credit to certain retailers. While this has resulted in improvement in our DSO, it's also impacted our revenues in the near term. Operating profit in the international segment declined 79%, excluding $8 million of Toys-R-Us-related charges. As was the case throughout 2018, lower revenues combined with higher cost to clear inventory drove the decline in operating profit. We've taken steps to lower our fixed cost base, notably in Europe, and to better align with our business priorities and the skillsets required to grow Hasbro in 2019 and beyond.
Entertainment and licensing segment revenues increased 5% for the year due to changes in revenue recognition and a multi-year digital streaming agreement for Hasbro television programing. Our consumer products business was negatively impacted by difficult movie year comparisons, as both the My Little Pony Movie and Transformers: The Last Knight were in theaters during 2017, as well as the loss of Toys-R-Us.
The adoption of the new revenue recognition standard contributed to higher revenues in the segment on a full year basis, as revenue from multi-year agreements is now recognized ratably across the licensed term. As we'd outlined throughout 2018, this new revenue recognition also resulted in less revenue recognized in the fourth quarter due to more being recognized earlier in the year.
The segment's operating profit is reported with $17.3 million. The segment's adjusted operating profit margin, excluding impairment charges, was 34.7% versus 33.8% in 2017.
During the fourth quarter, we performed our annual goodwill impairment test, including for Backflip Studios. Mobile gaming is a dynamic market, and the team modified its long-term plan to succeed in this space. This included organizational changes and the pacing of launch dates for games and development, as well as bringing in development partners for future releases. Our long-term plan also provides for investments in advertising and the right in-house capabilities to succeed. As a result of changes to Backflip's long-term plan, we concluded the associated goodwill was impaired, and we recorded a pre-tax non-cash impairment charge of $86.3 million in the fourth quarter.
Overall, Hasbro operating profit margin declined year-over-year. The team is very focused on managing costs and improving our margin in 2019 and beyond. As part of these efforts, we incurred $89.3 million in pre-tax severance cost last year and anticipate delivering $70 to $80 million of gross annualized savings by 2020. We plan to reinvest $10 to $15 million this year to bring on board relevant skillsets and talent.
Moving on to cost, on an as-reported basis, cost of sales increased to 40.4% of revenues from 39% in 2017. The 140-basis point increase resulted from higher levels of closeout sales, higher obsolescence reserves to end the year, and lower gains on FX hedges. Growth in higher-margin revenues, including Magic: The Gathering and the entertainment and licensing segment, partially offset this impact.
We invested in innovation, spending 5.4% of revenues on product development. We're looking forward to sharing with you many of these new initiatives at Toy Fair but also in future years as our investments are focused several years out.
The lower dollar amount in 2018 was driven by the capitalization of certain Magic: The Gathering Arena costs versus 2017, when they were expensed.
Program production amortization increased to 1% of revenues, reflecting the delivery of a multi-year streaming deal for Hasbro television content and amortization of our investment in the My Little Pony Movie. As reported, SDNA included $257 million of charges related to the items discussed earlier. Excluding these charges, SDNA decreased by an approximate $94 million in 2018.
Stock compensation and bonus expense declined. This was partially offset by higher shipping and warehousing costs in the US and higher bad debt provisions in Europe.
Turning to our results below operating profit, our income net was $30.2 million versus $74.1 million last year. While many factors contributed to the change, the three primary drivers were as follows. In 2017, we realized a $19.9 million gain due to a change in the value of a long-term liability due to US tax reform. In addition, we had $10.8 million of foreign currency losses in 2018 versus a $1.3 million gain in 2017. Also, due to accounting standard changes beginning in 2018, pension expense for our frozen plans is now recognized in this line and totaled $5.8 million.
Our underlying tax rate was 18.3% versus 19.9% last year. The impact from tax reform changes to the US tax code was offset by a significant change in the mix of where the company earned its profits, mainly the result of lower European revenues. Our effective tax rate for the year, absent the impact of US tax reform in the non-GAAP charges, was 9.1%, compared to 9.5% in 2017. This includes discrete items such as the benefit of tax planning, reassessment of historical tax reserves, accounting standard governing stock compensation, and audit settlements.
Adjusted earnings per share, excluding $268 million of after-tax charges, was $3.85. On a reported basis, including the $2.11 of charges, net earnings were $1.74 per share.
Our yearend balance sheet remains strong. We generated $646 million in operating cash flow, and today we announced that the board declared an 8% quarterly dividend increase, payable in May. Receivables decreased 15%, and we're down 12% excluding the impact of foreign exchange. Day sales outstanding decreased two days to 78 days.
Hasbro-owned inventories increased 2% at yearend and were up 7%, excluding the impact of foreign exchange. Inventory levels declined internationally, led by Europe, but increased in the US and in the new Hasbro-operated markets of India and Japan. The quality of our inventory is good, and we began 2019 with significantly lower retail inventory in several major markets, including the US and Europe.
The global team managed through a very disruptive year, working closely with our retailers, engaging directly with our consumers, and aligning around our growth plan. We have a solid financial foundation upon which we are operating and investing, which affords us the ability to take actions for the long-term while also pivoting our near-term behaviors to reflect a rapidly changing global market. Our teams have tremendous innovation and strategic plans for this and future years, and we look forward to sharing more of those with you on Friday, February 15, at our New York Toy Fair investor event.
We will now open the call up for questions.
Questions and Answers:
Operator
Thank you. At this time we'll be conducting a question and answer session. If you'd like to ask a question, please press *1 on your telephone keypad, and the confirmation tone will indicate your line is in the question queue. You may press *2 if you'd like to remove your question from the queue. For participants that are using speaker equipment, it may be necessary to pick up your handset before pressing the * keys.
Our first question today is coming from the line of Felicia Hendrix with Barclays. Please proceed with your questions.
Felicia Hendrix -- Barclays -- Analyst
Hi, good morning.
Brian Goldner -- Chairman of the Board and Chief Executive Officer
Good morning.
Felicia Hendrix -- Barclays -- Analyst
Hi. If Brian or Deb -- I'm just wondering if it would be possible to give us adjusted numbers ex Toys-R-Us or some kind of indication of how much the 13% of sales decline was attributed to Toys-R-Us.
Brian Goldner -- Chairman of the Board and Chief Executive Officer
Well, the way we look at the business, Toys-R-Us is wrapped up in our results, and we could look at and have seen growth in other customers. We've seen growth in other channels. We talked about the fact that we've opened other doors, and whether it's value or online, we've talked about the growth there. But given that we have these big ongoingly successful brands over time, these brands are more impacted by the Toys-R-Us bankruptcy and liquidation. And we've talked about that.
But again, we expect to return to growth in 2019, and in the fourth quarter the big difference was that our estimates of what the liquidation would represent and what experts had indicated about people's purchasing product to be given away sooner versus later were both off. And therefore the liquidation had a greater impact in the fourth quarter, but we have these big brands and franchises as well as our partner brands that were being supported substantially by Toys-R-Us but other retailers. And we expect to now return to growth across a number of those brands. We also had a number of brands grow within the year and in the fourth quarter.
Deb Thomas -- Executive Vice President and Chief Financial Officer
And I think if we had to rate them, Felicia, and we tried to convey that as well in our prepared remarks, but it's -- Toys-R-Us really was the most impactful to our business, and you think about the fourth quarter and the holiday season and for the reasons that Brian talked about. It was, you know, the inventory that was in the channel, which us and experts had estimated would have been cleared through by the end of the third quarter. It really hadn't. And, you know, so that really was the most impactful, and after that it was really Europe. And it's the things we've been talking about all year.
Felicia Hendrix -- Barclays -- Analyst
And just in terms of like the mismatch between the estimates and the reality, do you think that's just more because this is something that was just so challenging to kind of forecast versus, you know, perhaps it being a consumer-related issue?
Brian Goldner -- Chairman of the Board and Chief Executive Officer
Yeah, you know, this was an unprecedented yet finite event, and I think that as we look back on our track record from 2012 to 2017, we've been delivering on the medium-term objectives we outlined for you. Over that period we achieved 5% in revenue growth CAGR. We achieved 13% net earnings growth CAGR, double-digit growth in emerging market, an expansion of operating profit margin by one full percentage point. We saw the emerging market grow double digits.
So the fact is we expect to return in 2019 to growth, and we see this as a finite event that began in the fall of 2017, if you remember. And to remind people, we still shipped product to Toys-R-Us in the first quarter of last year, 2018, but we do see the headwinds from the Toys-R-Us bankruptcy that we've experienced since the fall of '17 that intensified during the liquidation dissipating during the first quarter of '19.
And we are gonna experience and generate tailwinds in 2019, and that comes from things that Deb and I outlined. The innovation, a strong entertainment slate, retail inventory's down, our inventory in a great position with inventory down in Europe, and new capabilities that we're on-boarding and addressing our organization to be digital and very strong.
Felicia Hendrix -- Barclays -- Analyst
Thank you for that. It actually kinda touches upon the kind of follow-up I have is -- Because I think on the last call you had said that the Toys-R-Us disruption could continue into the first half. Sounds like, you know, just from a comp perspective, maybe the first quarter, but past the first quarter are you kind of moving forward or is it still gonna be kind of a first half noisy type of thing?
Brian Goldner -- Chairman of the Board and Chief Executive Officer
Yeah, so in the US, we continue to ship in first quarter, and then US no longer ship because, if you recall, right after Toy Fair last year Toys-R-Us announced the liquidation. I think the only other country that goes this little bit beyond is Australia. So you'll probably have a bit of an impact there, and then they ultimately liquidated there. But yes, 2019's about a return to growth, about move beyond the Toys-R-Us bankruptcy and liquidation, and we expect to see growth this year, as well a growth in operating profit and an expansion of our operating profit margin in our plans.
Felicia Hendrix -- Barclays -- Analyst
Okay. Then just my final is just on POS, you both said it was up ex Toys-R-Us. Just wondering if you could give us some magnitude. Was it up low single digits, mid single digits? Just some more color might be helpful.
Brian Goldner -- Chairman of the Board and Chief Executive Officer
Yeah, so overall POS globally without Toys-R-Us...was overall globally POS was just down like less than 1% and North America was up low single digits, and Europe was down high single digits. Latin America was up. Asia-Pac was down mid single digits. But our global franchise brands were up low single digits. Emerging brands were up mid single digits, and our games business was up low single digits. Partner brands were down.
Felicia Hendrix -- Barclays -- Analyst
Right, and the Europe is because of the transition that you're having there or was it something else being down high single digits?
Brian Goldner -- Chairman of the Board and Chief Executive Officer
Yeah, the transition and the market. Exactly. And the fact is we wanted to ensure that we had completed our goal, our task, and our plan of eliminating retail inventory, and we also reduced our inventory. And the great part that we're hearing is as teams are leaving Nuremberg and working on the year's plan for 2019, the conversation is really shifted to be about the plan forward, growing our business, and going after the innovations and the entertainment-led brands that we have for the year.
Felicia Hendrix -- Barclays -- Analyst
Perfect. Thank you so much.
Operator
The next question is from the line of Arpine Kocharyan with UBS. Please proceed with your questions.
Arpine Kocharyan -- UBS -- Analyst
Hi. Thank you very much. I wanted to go back to retail inventory for a second, because it seems like POS globally including Toys-R-Us would be down but then shipments were down as well. But if you look at Q3, that was the case, right? You were down double digits and POS was down double digit, yet we saw inventory impact in places like Europe heading into Q4. I guess what's inventory situation ex Toys-R-Us at retail? And then owned inventory was up constant currency, and we're heading into Q1 where you have also Easter shift and, as you mentioned, some impact from Toys-R-Us disruption. Could you just go over what's contributing to that owned inventory to be up ahead of a quarter that's gonna be seasonally obviously weak and you have Easter shift? And then I have a quick follow-up.
Brian Goldner -- Chairman of the Board and Chief Executive Officer
Yeah, so our inventories are up nominally about $10 million year-on-year, and remember that going into the year, not only do we have new initiatives coming in the first quarter and a number of them new product, whether it's entertainment led like Captain Marvel, our other new brand initiatives like Transformers that goes into its home entertainment window. It performed incredibly well at fourth quarter. It was up in the quarter both in the US and internationally, so up overall. And then we head into the second quarter with a number of entertainment initiatives there as well. The Avengers is back in theaters. We have Spiderman that hits theaters. Both in the second quarter, and as I said brands like Play Doh, although not up for the year, had great momentum. And we're really seeing where new initiatives around that brand are taking hold, and we're seeing a good performance there.
So I think that we're positioning ourself for a good year, and I know, Deb, you wanna...
Deb Thomas -- Executive Vice President and Chief Financial Officer
Yeah. And just from a geographic standpoint, our owned inventories are down significantly in Europe. They're up a tad in the US, and Brian spoke to a lot of the things that are hitting early in the year. And they're also up in markets where we have new offices, so, you know, for example, we have an office in Japan now. We didn't have that a year.
Brian Goldner -- Chairman of the Board and Chief Executive Officer
And in India.
Deb Thomas -- Executive Vice President and Chief Financial Officer
India, as well, which we've been building in the year, but most of the increase is really coming from that.
Brian Goldner -- Chairman of the Board and Chief Executive Officer
Yeah, so we're down --
Arpine Kocharyan -- UBS -- Analyst
Right.
Brian Goldner -- Chairman of the Board and Chief Executive Officer
Down in our owned inventory substantially in Europe as well as retail inventory, and down in retail inventory in the United States. So I think we're really well-positioned in very high quality inventory.
Arpine Kocharyan -- UBS -- Analyst
Right, right. No, thank you. I'm just also wondering about your mentioning of stabilization for Europe this year versus sort of growth and return to growth beyond '19. I think you mentioned inventories were down 27% in that market. Wouldn't that set you up to grow nicely this year in Europe then? Because inventories are down so much?
Brian Goldner -- Chairman of the Board and Chief Executive Officer
Well, look, I think we really, as a team, as you can hear, are very thoughtful about the way we plan out our businesses, and we recognize that we can grow our overall business and stabilize Europe in 2019. We want to ensure that the changes that we're making are taking hold. We've organized our business very differently right now, and going forward Amazon is our No. 1 customer in Europe. Toys-R-Us no longer really operates as a top customer in Europe. We have it in a couple of territories under new ownership. We have Smith's, which is a fantastic toy specialist, which was in the UK, but now bought the German, Austrian, and Switzerland business. And so they've grown to become a top customer for us. So it's just all the shifting dynamics that we want the team to be able to accomplish a number of objectives, and for us we wanna make sure we're very clear that stabilizing Europe this year and growing it beyond in an environment where we grow our business overall would be a great accomplishment.
Arpine Kocharyan -- UBS -- Analyst
Great. Great. And then I have a, just switching gears to gaming, you mentioned in the release and I think in prepared remarks that there are some initiatives to redesign your go-to market strategy for digital. Does that change anything in terms of Magic: The Gathering Arena outlook for the year and the profitability profile for that franchise? There's a lot of investor excitement around Magic Arena for this year. Anything you could tell in that regard would be very helpful.
Brian Goldner -- Chairman of the Board and Chief Executive Officer
Yeah, Magic Arena is performing very strongly for us and exceeding the measures for engagement and stickiness. You know, it's early days. We're still in the open beta. We haven't officially launched, and yet in the fourth quarter we had nearly 350 million games of Magic played in Arena. On average, a Magic player is playing for about 8 hours per week. The e-sports viewership during the quarter was doubled on Twitch. It's now a top 10 viewed game. And so we are also seeing as we look at measures of engagement and monetization, they are beating our early estimates. The other great part about what the team is doing, and they are doing a fantastic job, currently Arena is available on PC, but given they're using something called the Unity engine it gives us a flexibility to move to other formats over time.
So again, we're in early days. We haven't even launched yet. We'll launch later this year. But all the indications are quite strong for Arena.
Deb Thomas -- Executive Vice President and Chief Financial Officer
And we'll talk more about Arena at Toy Fair next week at our investor event next Friday, but when we were really talking about gaming and mobile gaming, it's really the Backflip mobile gaming. We were talking about it. Because of the changes we've seen, we modified our plans, and frankly we think we modified them to be more successful with the way that mobile gaming has moved go forward. It just created an accounting remeasurement, and from an accounting standpoint that created the goodwill impairment. So we believe that all the modifications to the plan are good. The pacing is better based on what we've seen. We're investing to make sure the games are successful when they launch through advertising and user acquisition. It's just those changes created the goodwill impairment from an accounting standpoint.
Arpine Kocharyan -- UBS -- Analyst
Thank you very much.
Operator
The next question's from the line of Michael Ng with Goldman Sachs. Please proceed with your question.
Michael Ng -- Goldman Sachs -- Analyst
Great. Thank you for the time. I have two questions about margins. First, and apologies if I missed the nuance, but when you talk to a return to growth in 2019, is that a return to profitable growth, which I would define as margin expansion? And could you just help us think about how those margins will look next year? And then second -- Oh, sorry. Go ahead.
Brian Goldner -- Chairman of the Board and Chief Executive Officer
No, you go ahead, Mike. Sorry.
Michael Ng -- Goldman Sachs -- Analyst
Okay. Oh, and the second question was just about the gross margin headwinds in the quarter, which you said included higher levels of closeouts and higher obsolescence. It seems to me that those are probably discrete issues related to Toys-R-Us and Europe. Is that true? And if that is, should we see a snapback back to more normal margins in 4Q '19 if it's a more normal revenue quarter, all else being equal? Thank you.
Brian Goldner -- Chairman of the Board and Chief Executive Officer
Yeah, so we do wanna talk extensively about our plan go forward next week at our analyst event for 2019 and we'll do that, but I'll tell you at a high level we expect margin expansion this year, an improvement in profitability across the company, and an improvement of profitability in Europe despite my comments about stabilizing the business in terms of revenues. And, Deb, I don't know if you wanna comment on anything else now.
Deb Thomas -- Executive Vice President and Chief Financial Officer
I have to save something for next week's Toy Fair. But I would agree with Brian's comment, and we will get into more detail on the components next Friday.
Operator
Thank you. The next question is from the line of Greg Badishkanian with Citi. Please proceed with your question.
Greg Badishkanian -- Citigroup -- Analyst
Great, thanks. Just on Nerf, Nerf had more exposure than most of your brands to Toys-R-Us. Can you talk about the impact from Toys-R-Us versus the competition within the category that you also discussed that we saw. And then how impactful could some of the licensing partnerships be like the Fortnite partnership going forward to reaccelerate the brand?
Brian Goldner -- Chairman of the Board and Chief Executive Officer
Yeah. So Nerf by far remains the leader in the category, and you're right. The liquidation had a major impact on Nerf in the near term. We had mentioned before that 2 million Nerf units went into the market during the Toys-R-Us liquidation. Due to its performance and innovation, Nerf also received also received larger shelf space at Toys-R-Us, and we saw and in the third quarter we talked about the fact that we'd seen the impact from liquidation. Us and industry third-party data had indicated that much of that would have been gifted, and in fact we've seen a continued impact from that liquidation.
Well, we know the blaster category is very competitive, and we are aggressively driving our position in the market. And we believe that when you buy a Nerf, you don't just buy our innovation but best performance, quality, safety, and so as we go into the year we're entering a new innovation cycle with propriety consumer insights in R&D. We do start with the gamer series this spring in Nerf Overwatch and Nerf Fortnite, which launch in March. And then we have all new innovation across price points with protectable innovations. And we're gonna show some but not all of it at Toy Fair, because again we feel that a lot of competitors are using our insights and innovations to create their products. And so we'll talk more about that. We've got a great lineup and very exciting things to say and to show in the showroom. But we feel very strongly that we can return Nerf to growth in '19 and beyond.
Greg Badishkanian -- Citigroup -- Analyst
Good. And just on some entertainment, Star Wars, Disney Princess, 2019, so outside of being a big movie year for you, anything you're planning to do differently that you're able to talk about on those two properties?
Brian Goldner -- Chairman of the Board and Chief Executive Officer
Yeah, I think, you know, Star Wars did have a difficult year as you compared to Solo to Last Jedi film from 2017. We're very excited about what LucasFilm and Disney have put together for the year. The franchise is going to be well supported with new entertainment and also experiences this year for the first time. We're gonna be delivering innovation in marketing programs directly to kids. We have Galaxy of Adventures, which we'll support, which is a kid-focused initiative with short form content on their Star Wars YouTube channel. There's also new entertainment experiences because The Mandalorian is an all-new TV series. It's executive produced by John Favreau that comes on Disney+. We're also seeing the opening of a major new theme park land with Galaxy's Edge, which is both in Anaheim and in Orlando. And then we get to the end of the year with the movie, Star Wars Episode IX which debuts in theaters in December. And that impact from the film and all of our efforts will reach across both 2019 and 2020. So we're really excited about a full year effort. Lots of really good product, very innovative product throughout the year corresponding to the entertainment.
And then Princess --
Greg Badishkanian -- Citigroup -- Analyst
Would that be like a -- Oh, yeah.
Brian Goldner -- Chairman of the Board and Chief Executive Officer
No, no. Go ahead. Sorry.
Greg Badishkanian -- Citigroup -- Analyst
Will it be like a 50/50 split on Star Wars because it's the end of the year, or is it like 60/40 or 40/60? How do you...?
Brian Goldner -- Chairman of the Board and Chief Executive Officer
Well, look, it's we're for the first time in a couple years back to the entertainment cycle we had seen in 2017, so coming out of all that we've experienced on Star Wars -- Remember that both Star Wars and Princes and Frozen were also very well represented at Toys-R-Us globally, and we know that had a significant impact. So in addition to being up against some of the major entertainment from 2017, there's that impact as well. So, you know, what I'd say is that we absolutely believe that Star Wars will have an impact in '19 and '20, but I won't quite yet express what percent of that business would come in which year.
Greg Badishkanian -- Citigroup -- Analyst
Sure. And Disney Princess, I'm sorry, you were gonna --
Brian Goldner -- Chairman of the Board and Chief Executive Officer
Oh, that's OK. You know, so Disney Princess, there was a lot of filmed and television entertainment in 2017, which we were up against, and so the brand did have tough comps. As well as I just mentioned, it was well-supported at Toys-R-Us, so that combination certainly impacted the brand. We're very excited about a number of initiatives that are coming for Princess this year. We have a movie that comes, Aladdin, in May of this year, which is a live action film that we will support. We also have a Disney Princess capsule programs around, some new product that's very exciting to see princesses in a different light. If you saw the Wreck-It Ralph movie, there was a great scene in there of the princesses having a slumber party, and we're playing off of that with our partners at Disney. And then we get to the year end in November, and extremely excited about a full array of product for Frozen 2. And, of course, being a November film, it will stretch and impact from 2019 through 2020, and I'm sure beyond.
Greg Badishkanian -- Citigroup -- Analyst
Thank you.
Operator
The next question is from the line of Tim Conder with Wells Fargo. Please proceed with your questions.
Tim Conder -- Wells Fargo -- Analyst
Thank you, and good morning. Brian, as you called out earlier, you know, you guys had great performance and execution 2012 to '17, and even in China, given everything that's going on over there, even in '18 here you guys have outperformed the industry. But I'll just ask the elephant in the room question here. As Toys-R-Us started to unravel, initially you didn't have the largest exposure or percent of sales, and yet it seems like that and Europe has been more problematic for you all relative to others in the industry. Can you kinda expand on what happened there?
And then with the shift to digital, I think you called out on the third quarter call, that you need more distribution centers in Europe to react more quickly to the retailers' needs. Is that part of the equation? And kind of where do we stand with that?
Brian Goldner -- Chairman of the Board and Chief Executive Officer
Yeah, so on the first point, you've heard others talk about brands that were ongoingly successful or big brands that had been in the market for a number of years, like our brands like Nerf and My Little Pony and our games business, where they were being incredibly well-supported by Toys-R-Us. There was a bigger or outsized impact to those brands than brands that might be rebuilding over some period of time, and you also see where we had brand new innovations that weren't involved with the liquidation, whether that be for Monopoly or Magic: The Gathering or Dungeons & Dragons or even Transformers in the fourth quarter. Those brands performed quite well, and so you can see really the differences.
You also see the difference when you compare Latin America, where there was no Toys-R-Us, or in Canada, where Toys-R-Us changed hands pretty seamlessly. We saw really good performances. And in Asia, even though we changed ownership of Toys-R-Us and Toys-R-Us is the second largest customer for us there, our business in Asia was good and our business in China was flat. So I think that we have had a level of success with our brands. As you mentioned and I'll reiterate, from 2012 to '17 we've grown our revenues at 5% and net earnings at 13% growth rates and expanded operating margins. So we view this as an event. We also believe, and I'll walk you through it in more detail next week, that we have every reason to believe and all the plans in place to get back into that kind of a performance post the Toys-R-Us event.
Tim Conder -- Wells Fargo -- Analyst
Okay. And then the distribution in Europe, just the --
Brian Goldner -- Chairman of the Board and Chief Executive Officer
Yeah, we continue to -- We always look at our footprint, and really it's not just distribution but it's capabilities and channel strategy. So today, as I mentioned, Amazon is our No. 1 customer in Europe, and we've moved to be more oriented toward a digital-first strategy to bring our capabilities we'd built in the US, being a top performer on online platforms, to Europe, and that's been a focus. We've also focused on where and how inventory gets placed into the market. We've also focused on our short-form content, content-to-commerce, and we'll continue to look at our footprint for warehousing.
Deb Thomas -- Executive Vice President and Chief Financial Officer
And I'd also add, Tim, and we've talked about this throughout the year, we've been very thoughtful. Given the economic situation in some of these countries, we've been very careful with extending credit, and as a matter of fact our cash collections have improved. You see that in our continuously strong cash flow, which was within our targets, based on the fact that we focused on making sure our collections were strong. We're reducing our DSOs. We've been extending credit to the right customers. So we've been very thoughtful about how we go into these new doors, who we extend our credit to, and making sure we can collect it at the end of the day. So you've seen some of that disruption this year, and we'll continue to do that go forward. But we believe based on all the changes we've made, the distribution efficiencies we've put in place, that we're really well positioned to stabilize and grow, in Europe and throughout our other markets.
Tim Conder -- Wells Fargo -- Analyst
And again, yeah, the cash management, given everything that went on, has been very good, so congratulations on that. As it relates to -- you talked about stabilizing Europe, profits grow in Europe for '19, and then profits grow overall for the company in '19, maybe just give us a little bit of an update. You'd talked about getting back to that however benchmark you wanna have it, the high 15, low 16 in change, operating margin. Where do we stand and how does that play and look now given the bump here we've had in '18?
Brian Goldner -- Chairman of the Board and Chief Executive Officer
Well, look. I think many people have asked, but, you know, we did experience an unprecedented event, and industry experts have likened it to be the worst event in the industry in the last decade. So we have to rerate our business off of our performance and where we ended 2018. We ended the year 2018 with the highest revenues in the industry at $4.6 billion with a strong profitability, albeit lower than prior year given all of the issues that we took on and all the changes the team's made. And so we grow from here, and we'll walk you through a progression of how we continue to rebuild our profitability and expand our operating profit margin and perform across a number of dimensions over time. But I think that's a great conversation for next week.
Tim Conder -- Wells Fargo -- Analyst
Sounds great. Thanks, Brian. Appreciate it.
Operator
Our next question is from the line of Drew Crum with Stifel. Please proceed with your questions.
Drew Crum -- Stifel -- Analyst
Okay, thanks. Good morning, everyone. Brian, can you talk about the product roadmap for Power Rangers this year? Is it a global launch or staggered, a global launch in 2Q or is it staggered? Was the relative of the line -- I think you mentioned some new content coming on board. Any detail you can provide there is appreciated. And then I guess separately I think that you mentioned in your preamble you expect to be at 60% exposure to China by 2020. Is there a longer term goal you have in mind for the business? Thanks.
Brian Goldner -- Chairman of the Board and Chief Executive Officer
Yeah, we'll continue, on production side, we're gonna continue to look at new places to put product. Some of that has to do with just expanding our footprint. Some of it has to do with trying to mitigate some of the...that you face in certain geographies around the world. People have asked about tariffs. One place we do experience tariffs is in Brazil, so local production of some products is helpful in mitigating those kinds of impacts. We continue to look at how to make sure we're making product in the right place, recognize we're making a really innovative product line that requires all kinds and different types of manufacturing, so we really believe in our asset-light type model, which gives us great flexibility to get great innovation, pricing, and a great reliable, safe product. So it's the next benchmark at end of 2020 to be 60% out of China.
In the US, about a fifth of our products are already made in the US, and about two-thirds we take in the US is coming from China already. For us, again, it's just a progression, and the team there is doing a great job in expanding our footprint and bringing new brands and our current brands to new geographies for manufacturing.
In terms of Power Rangers, we're incredibly excited. We have our new series that will launch later this spring called Beast Morphers for Power Rangers. The product line is extensive. It's now been shown around the world at multiple toy fairs, and retailers are very excited. Our consumer products teams are really stepping up behind that excitement. So this is a new original series that's produced by the same team that had produced Power Rangers before, albeit with new energy and a connection between our teams and the original core Saban team that's really just tremendous. And we're incredibly excited.
It will launch in North America in Q2, and then launches in the rest of the world throughout the remainder of the year. So it's a rollout. Obviously English-speaking territories before it goes to translated territories, in terms of language, but...2020 plans and beyond are even more robust because we get it for a full year and then we do intend to add a movie to the mix in the next few years. And so, again, we will build this brand. This brand had been far bigger in the past than it was at present, and we feel like there's a lot of opportunity. It reminds me a lot of the early days of some of our Hasbro brands, where we really looked at how big they had been in their history and asked ourselves, "How big could we make this in the future?" And we believe in the power and the potential of Power Rangers.
Drew Crum -- Stifel -- Analyst
Brian, can you remind us where you're getting distribution for the television series?
Brian Goldner -- Chairman of the Board and Chief Executive Officer
Sure. We have a great partnership with Nickelodeon, and we have a commitment from them. Great new leadership at Nickelodeon with Brian Robins and the team, and Bob Bakish has been incredibly supportive of our efforts there and also our efforts with Paramount, parenthetically, where we would produce the movie alongside of our relationship on Transformers and other films. So they have a great team there, and we feel very strongly about our opportunity to work with them and to build this brand together.
Drew Crum -- Stifel -- Analyst
Yeah, OK. Thanks, guys.
Operator
Our next question is from the line of Michael Swartz with SunTrust. Please proceed with your questions.
Michael Swartz -- SunTrust -- Analyst
Hey, good morning, everyone.
Brian Goldner -- Chairman of the Board and Chief Executive Officer
Hey, good morning.
Michael Swartz -- SunTrust -- Analyst
Just a quick, quick point of clarification, Brian. I don't know if I had this right, but when you talked about inventory's down I think 20% plus in both North America and Europe. Was that excluding Toys-R-Us?
Brian Goldner -- Chairman of the Board and Chief Executive Officer
No, that includes Toys-R-Us, but inventories are down across the board. And remember, the way the order pattern worked that what we could see is that while retailers were out for share recapture, they also were out for managing yearend inventories. So we were careful in working with them. We did not end the year with our own inventories up more than the $10 million, but retail inventories in the US were down 24% and in Europe were down 27%. And some portion of that is Toys-R-Us, and then there's a substantial portion of that that's also other retail. But remember also, remember also that we're opening new doors of retail. We've opened tens of thousands of new doors of retail, everything from food, drug, club...I'll leave something out. Sporting goods. And so we have a great channel strategy and product development that's marrying up to bring the right products to the right channels and the right price points with the right retail margins and margins for Hasbro.
Michael Swartz -- SunTrust -- Analyst
Okay. That's helpful. And just adding on to that, I mean, I think, one of the major challenges you've had later in the year was some of the mass retailers tightening up on inventory. I guess, in your early talks with them about how they're thinking about '19, is there incremental risk that they get even tighter with their inventory levels? Or do you think that's now kind of normalized or stabilized?
Brian Goldner -- Chairman of the Board and Chief Executive Officer
Well, look, I think the way we view it is, it was definitely a change in the business related to the fact that Toys-R-Us was no longer going to exist with inventories in stock in December, and so as a result one can gain market share without necessarily being fully in stock at the end of the year. And we will always work on our inventories, and just in time our new warehouse in the Midwest is all about ensuring that we get better at just-in-time inventory. We're using even flexible space in that warehouse where we'll able to within a day or two move inventory from our inventory to other retailers' inventory. And so we'll continue to hone this, but I don't believe that there's a step change in inventory. I believe it's just going to be a perpetual drumbeat to improve inventory, inventory management, just-in-time inventory, around our initiatives go forward, and the team is absolutely prepared for that.
Michael Swartz -- SunTrust -- Analyst
Okay, great. And then one final question if I may, just I guess a little more clarity on the cost savings that you outlined for '19 and '20. I think I was getting the gross and the net amounts confused, so you can go back over that quickly one more time.
Deb Thomas -- Executive Vice President and Chief Financial Officer
Sure. By 2020, we expect to achieve gross cost savings of $70 to $80 million, and, you know, we've got a transition period, because while we put the plan in place we'll be executing it throughout this year. So in 2019 net of the add backs that we expect to do to, you know, for the items that we continue to invest in, if you think about we talked a bit about Arena and Wizards of the Coast Earlier, we continue to make investments in our business because that does remain our No. 1 capital priority because we wanna make sure we're set up for the long term. We've always been that way as a company. So we continue to make investments, so the net is 50 to 55 in 2019.
Michael Swartz -- SunTrust -- Analyst
Okay, great. That's helpful. Thanks, Deb.
Operator
The next question is from the line of Eric Handler with MPM Partners. Please proceed with your questions.
Eric Handler -- MPM Partners -- Analyst
Thanks, and good morning. Wonder if you could talk about, with all of the new doors that you've opened and different types of retailers in the last year, I'm curious if there are any segments that you found to be better than expected or over-delivered and what they might be able to do. And then I've got a follow-up question after that.
Brian Goldner -- Chairman of the Board and Chief Executive Officer
Yeah, look, it really -- this comes back to incredible kudos I give to our product development team and our marketing teams, because it all begins with great product development that's made in the right manner for the right type of retail. So we've been able to recognize the increased demand for exclusivities among retailers to give them a position on our brands that allows them to market our brands and to feel that they can make a fair return on our brands. So if we're going to a gaming type company, we want to give them the right array of product that's focused on that gaming fan and collector and the fan economy. If it's a sporting good store, it would probably more focused on our Nerf business and giving them products that are right for their audience. And so it's really those handshakes and those partnerships that are really important, and then we also have to get to value and discount stores and make sure we're making a product that can be sold to achieve a lower absolute price point and still retain margin for us and for the retailer.
You know, I think that we've made a major pivot here over time where we really wanna ensure that kids at every socioeconomic level have an opportunity to play with and participate in our brands, and we work all the time with our teams make sure that we can provide a great product for them. So that's been a process that's ongoing, but also you really see it take hold when you add so many doors, so many thousands of doors, at retail in the US and now applying that same channel strategy to Europe. We're seeing thousands of new doors opening in Europe.
Eric Handler -- MPM Partners -- Analyst
Okay. And then a question on mobile. It was interesting what you've been saying here. Electronic Arts has some similar issues, it seems, in mobile. I'm just curious, what is your strategy here with mobile, what you can do with Backflip, what -- It seems like the top -- You need to have a top 10 games if you're gonna be really successful in mobile and how that view shapes what you wanna do?
Brian Goldner -- Chairman of the Board and Chief Executive Officer
Yeah, I think the first dynamic that you really have seen, and it's a long of arc of change that's gone on in the industry. There was a time not that many years ago, because change is happening so quickly, where the most important thing you could do is develop the game, and then you'd put it out on the market. And I'll call it the kind of fire-and-forget approach to the game, where the first day you put it on the market might be its most important day. And today, of course, we all know that's evolved to be one of the important days but not the most important. The most important days come as you look at D7, 14, 21, 28 retention. So we go off and we work on in small markets around the world, looking at the monetization model, which means proportionally as you look at the composition of your teams, you need more people who are in data analytics and monetization. You still need great artists and creators, but you have to find the right balance between the two.
So that's been the big arc of change, and so as that change has occurred w
Source: Company, Moneycontrol Research.
Source: Company, Moneycontrol Research.
Source: Company, Moneycontrol Research.
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