Canaan Inc. Q2 FY2024 Earnings Call

Ladies and gentlemen, thank you for standing by and welcome to Canaan Inc.'s Second Quarter 2024 Earnings Conference Call. At this time, all participants are in the listen-only mode. After the management's prepared remarks, we will have a question-and-answer session. Please note that this event is being recorded. Now, I'd like to hand the conference over to your speaker host today, Ms. Gwen Lauber, Investor Relations Director of the company. Please go ahead, Gwen.

Thank you, operator. Hello, everyone, and welcome to our earnings conference call. Joining us today are our Chairman and CEO, Mr. Nangeng Zhang and our CFO, Mr. Jin Cheng, or James. In addition, Mr. Leo Wang, Head of Capital Markets, and Ms. Xi Zhang, IR Manager, will be available during the question-and-answer session. Mr. Zhang will start the call by providing an overview of the company and performance highlights for the quarter. Mr. Cheng will then provide details on the company's operating and financial results for the period before we open the call up for your questions. Before we continue, I would like to refer you to our Safe Harbor statement in our earnings press release. Today's call will include forward-looking statements. These statements include, but are not limited to, our outlook for the company and statements that estimate or project future results of operations or the performance of the company. These statements speak only as of the date hereof and the company assumes no obligation to revise any forward-looking statements that may be made in today's press release, call, or webcast, except as required by law. These statements do not guarantee future performance and are subject to risks, uncertainties, and assumptions. Please refer to the press release and the risk factors and documents we filed with the Securities and Exchange Commission regarding including our most recent Annual Report on Form 20-F for information on risks, uncertainties, and assumptions that may cause actual results to differ materially from those set forth in such statements. In addition, during today's call and webcast, we will discuss GAAP financial measures and certain non-GAAP financial measures, which we believe are useful as supplemental measures of the company's performance. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results. You can find additional disclosures regarding these non-GAAP measures including reconciliations with comparable GAAP results in our earnings press release, which is posted on the company's website. With that, I'll now turn the call over to our Chairman and CEO, Mr. Zhang. Please go ahead, sir.

Okay. Hello, everyone. This is Nangeng, the CEO of Canaan. Thank you for joining our conference call. Our CEO, James, and I are at the company's headquarters in Singapore to share our quarterly results with you. The major event in Q2 2024 was the fourth Bitcoin halving. The Bitcoin network ran mostly without any issues during this halving. Amid intense market fluctuations, the Bitcoin price varied between about $71,000 at the beginning of the quarter and a low of $66,000, eventually closing at $61,000 by the end of the quarter. The total network hash rate remains relatively stable, with growth slowing, but not declining significantly. As I mentioned during the last earnings call, the quarter before the halving tends to be quiet, but the market quickly recovers afterward. Our operations continued steadily, inventory reduction proceeded on time, and the A14 series products began large-scale deliveries as scheduled. Our new product, the A1566, was launched with outstanding performance, and our global sales network continued to expand. Our operations were optimized and adjusted, successfully weathering the challenges of the halving. This quarter, our revenues saw significant sequential growth, exceeding our expectations. Let me now walk you through a few key areas. In R&D, we have continued to drive product innovation. The mass production wrap-up for our A14 series products has been successfully completed. Through close collaboration with our foundry partners, we have seen smooth improvements in the yield rates and production capacity for the A14 series. These improvements have enabled us to deliver more computing power than initially expected from the wafers we had ordered. In May, at Bitcoin Asia 2024 in Hong Kong, we launched our Air-cooled A15 series miners, pushing energy efficiency to approximately 18 joules per terahash and around 200 terahash in single unit computing power. Later, at the end of June, during the Mining Disrupt Conference in Miami, we introduced the liquid-cooled model of A1566I, which achieved a computing power of 249 terahash per unit. The A15 series, which is on a different process node from A14, is currently undergoing a similar mass production ramp-up, yield improvement, and capacity increase. Based on the current progress, the A15 series is advancing more smoothly than the A14 did at the same stage. We are confident we will complete the above process within the next few weeks, propelling the A15 series into mass production for large-scale delivery. In addition, we have been working closely with our customers to provide customized integrated mining solutions tailored to their specific needs. Starting this quarter, the Middle East has entered an extremely hot season, with temperatures reaching around 50 degrees Celsius. The liquid-cooled and air-cooled systems we deployed earlier have successfully withstood the harsh conditions. Regarding the next step after the A15 series, as per our EURO practice, we do not announce new products before obtaining actual test results from completed machines. What we can share at this stage is that the development of our A16 series is progressing smoothly. We are utilizing more advanced process nodes, and through process advancements and close collaboration with our wafer fabrication partners, we aim to push the critical power efficiency matrix of the entire machine into the 10 plus joules per terash range. When this milestone is achieved, the air-cooled machines will be poised to reach the 300 terahash threshold in computing power for a single unit. Although some may feel that innovation is slowing in this industry, it is still far from reaching its limits. In terms of sales, we achieved a total computing power sales of 6.2 million terahash for Q2, marking significant 84% sequential growth. This was driven by the large-scale delivery of our A14 series, which has become our main product, leading to a 33% sequential increase in the average selling price of our computing power. At the same time, we further cleared our inventory of traditional models, primarily A16, leading to an optimized inventory mix by the end of Q2. Our one-stop mining solutions have gradually gained market traction, contributing $4.6 million in revenue. We also launched the mining heater Avalon Nano 3 for individual customers. Since its launch in Q1, the product has seen strong demand, and we sold over 11,000 units pre-ordered by the end of Q2. As of today, we have shipped over 10,000 units to 75 countries and regions worldwide, receiving highly positive market feedback. This quarter, we made substantial progress in several key regional markets. In North America, we secured a significant resale order of 6,600 units of our new A1566 model for Cipher, a listed mining company. Additionally, we successfully completed deliveries on previous orders from several other listed mining companies and continue to collaborate with more. This led to a ten-fold sequential increase in recognized revenue from the region. Our products, performance, durability, and the professionalism of our delivery programs were highly recognized by our customers, establishing a strong reputation to support further business expansion in North America. In the Middle East, our mining machines and the one-stop mining solutions are gradually gaining traction. Our machines with superior heat resistance and comprehensive solutions that enable quick deployment have been very well received by customers, resulting in a five-fold sequential increase in revenue from the region in Q2. In South Asia, our channel partners continue to contribute stable orders. Our traditional models, known for their cost-effectiveness and resistance to heat and humidity, remain very popular in this region. Our online store catering to individual customers overseas saw a 314% quarter-over-quarter increase in registered users and a dramatic increase in orders since the launch of Avalon Nano 3 on the platform in Q2. Demand has been especially strong in North America, where nearly 50% of orders have come from. Further boosting our brand recognition in the region through our market-selected sales efforts and a more diverse product portfolio, customer advances increased significantly by 30% quarter-over-quarter to $51 million by the end of Q2, laying a solid foundation for revenue growth in the second half of the year. This quarter, our mining operations performed steadily, successfully navigating the challenges brought by the Bitcoin halving, generating $9 million in mining revenue, despite a decline of 11% compared to the first quarter. We continued to optimize our mining project matrix by advancing hash rate deployment in new pilot projects while closing existing projects that were negatively impacted by policy changes. We are also nearing the completion of our exit from operations in Kazakhstan and Paraguay. As of August 10, 2024, our self-mining operational hash rate has reached 4.5 exahash per second, exceeding our previous guidance of 4.3 exahash per second mentioned in the last earnings call. Additionally, we successfully maintained an average electricity cost at a variable level of $4.02 per kilowatt-hour, allowing our mining growth margin to remain steady at 33%, similar to the first quarter. In Q2, we mined 141 Bitcoins, bringing our total Bitcoin holdings, including pledged Bitcoins, to 1,114, an increase of 57 Bitcoins from the previous quarter. We will continue to strike a balance between policies, stability, and energy cost advantages to strategically enhance our mining business. In our first quarter 2023 earnings call, we disclosed our plan to use more advanced mining machine models for our mining-based operations. We also mentioned that, in addition to corporate mining models, we considered fixed rate hosting and other approaches such as self-building or acquisitions to actively participate in mining operations and explore more collaborative opportunities. We would like to reaffirm these mining strategies. Additionally, when evaluating our mining operations and opportunities globally, we have concluded that North America holds strategic importance. This region offers strong legal protections, valuable infrastructure, and a rapidly developing Bitcoin mining ecosystem. According to our calculations, from the end of 2022 to the end of Q2 2024, the total hash rate growth of publicly listed mining companies in North America was 237%, outpacing the global network hash rate growth of 114%. Given that we view North America as a strategic opportunity, we are announcing our plan to focus on this region. We expect to increase our mining hash rate target in North America from the current 0.65 exahash per second to 10 exahash per second by the first half of 2025. As a global provider of Bitcoin mining solutions, we are uniquely positioned to seize mining opportunities in North America. First, we have the flexibility to allocate mining machines inventory worldwide, optimizing mining investments returns and diversifying risk. Second, with comprehensive industry insights ranging from mining machine manufacturing, supply chains to global mining markets, we can more effectively evaluate investment opportunities and quickly match mining machines with optimal setups for short-term gains and long-term success. Third, our standing and reputation in the industry further enhance our ability to establish strategic partnerships with the global mining community. Lastly, our advanced design capabilities allow us to customize mining solutions tailored to different environmental and economic conditions, whether in regions with extreme weather or in scenarios requiring flexible power load management and response strategies. At the same time, we hope these projects will serve as a showcase for potential customers around the world to learn about Canaan. We are fully committed across multiple dimensions, including capital, construction, operations, and efficiency, to make these products outstanding. By accumulating valuable experience, we aim to better serve our clients. In Q2, we continued to improve our operations, significantly reducing total expenses due to optimized G&A expenses, which have narrowed our operating loss by 61% year-over-year and 32% quarter-over-quarter. Although the decline in Bitcoin price at the end of Q2 led to an almost $10 million reduction in cryptocurrency fair value on the income statement, we still achieved a 62% year-over-year reduction in net loss. With revenue remaining stable on the balance sheet, the successful bulk delivery of A14 products and the strong cash inflows from sales contributed to a 22% quarter-over-quarter increase in our cash position, bringing it to $67 million by the end of Q2. While maintaining a safe cash level, we also made strategic moves to secure advanced process capacity in our supply chain through prepayments. As we enter the third quarter of 2024, our A14 series mining machines are being delivered on schedule and contributing to our revenue. Following the launch of the A15 series, we expect to complete its mass production ramp-up within this quarter. The main R&D work for the A16 series will also be completed by the end of this year. Beyond chip development, we are rapidly expanding our product line and solutions to meet the post-halving demand for equipment upgrades and mining site deployments from global miners. We believe the upcoming Bitcoin bull market will be driven by broader public adoption. In this regard, we are developing a consumer-focused product line to make mining a part of everyday life and bring benefits to the general public. At the same time, we recognize that global political and economic instability is increasing, leading to more volatility in Bitcoin prices, which presents ongoing challenges for the industry. Based on the overall situation described above, we maintain a cautiously optimistic outlook for the third quarter of 2024. We anticipate revenue for the third quarter to be approximately $73 million. This forecast is based on the current market and operational conditions for the company, and the actual results may vary. Bitcoin's fourth halving was completed in Q2, but the global political and economic dynamics surrounding Bitcoin continue to evolve, bringing it to a wider audience. While the price of Bitcoin may experience significant fluctuations during this process, it also helps the public to better understand and accept Bitcoin. Our company navigated the halving quarter with a stable stance, continued to invest heavily in both product development and capacity expansion. We remain confident in the long-term prospects of Bitcoin and the revival of this bull market. We are already back on the path to growth. This concludes my prepared remarks. Thank you, everyone. I will now turn the call over to our CFO, James.

Thank you, NG, and good day, everyone. This is James speaking from our Singapore headquarters. As NG stated at the top of the call, Q2 2024 was significant as we experienced a Bitcoin halving event, which occurs about every four years. Bitcoin price fluctuated from $71,000 to $56,000 and eventually landed at $61,000 by quarter's end. Total network hash rate performed considerable swings but continued the growth trend. As we expected, customers were more active in Q2 to upgrade their mining machines compared to Q1. We used the A15, A14, and A13 series to satisfy diverse demand from various customer groups. Let me give a quick summary of our financial performance in Q2. First, with considerable upside in demand and successful large-scale deliveries of our new A14 series, we achieved a total revenue of around $72 million, which beat our guidance by around $2 million, marking a sequential growth of around 105%. Secondly, A14 delivery enabled a higher average selling price, which contributed to a narrowed gross loss of around $19 million, indicating a sequential improvement of around 49%. Thirdly, cash balance increased to around $67 million, representing a 22% sequential growth. As of August 10, 2024, our self-mining hash rate reached around 4.5 exahash per second, helping our owned Bitcoin accumulate to a total of 1,114 Bitcoins, which is a new high. Last but not least, with the A15 series announced, we collected orders and advances from customers. The balance of customer advances increased to $51 million by 30% sequentially, indicating a solid revenue foundation for the second half of the year. Let's look at our profit and loss. In Q2, our total revenue was around $72 million. Revenue from machine sales was around $57 million. We sold a total computing power of 6.2 million terahashes per second, representing a quarter-over-quarter increase of around 84%. The average selling price increased by around 33% from $6.9 per terahash per second in Q1 to $9.1 per terahash per second in Q2. Driving the increase in computing power sold and average selling price, revenue from machine sales rose by around 146% quarter-over-quarter. From the product side, large-scale delivery of the A14 series contributed nearly 80% of machine sales revenue. From the sales side, our multi-dimensional global sales system made positive progress in key regional markets during the quarter. In Q2, our customers from North America and the Middle East contributed 52% and 17% to our machine sales revenue. Turning to the revenue from our integrated mining solutions and Avalon Nano 3 mining heater, which diversified our product revenue streams. In Q2, we recognized around $4.6 million in revenue from integrated mining solutions, primarily contributed by customers in the Middle East and South Africa. We also recognized around $0.5 million in revenue from Avalon Nano 3 deliveries, with total orders achieving $1.3 million at quarter's end, primarily from North America and Europe. For our mining machine sales, we accrued $17.3 million for inventory write-down, prepayment write-down, and inventory purchase commitments, reflecting a quarter-over-quarter decrease of 64% and year-over-year decrease of 62%. The decrease was driven by ongoing stock clearance in this quarter. These non-cash write-downs and provisions, made under US GAAP rules, impacted our gross profit but not our cash status. Excluding these write-downs, we would have a gross profit of $0.7 million for mining machine sales. Mining revenue was $9 million in Q2, a decline of 11% quarter-over-quarter. We mined 141 Bitcoins this quarter, a decrease of 28% over the last quarter. This decrease was primarily driven by the Bitcoin halving event, which occurred in April, resulting in a significant increase in Bitcoin mining difficulty. Our average revenue per Bitcoin in Q2 increased 23% over the last quarter, from almost $54,000 to almost $66,000. We also further expanded our mining business in Africa, where installed hash rates reached 2.7 exahash per second by quarter's end. Overall, our self-mining hash rates reached around 4.5 exahash per second by August 10, 2024. Q2 mining profit was 38 Bitcoins, and the gross profit margin was stable at 33%. Please note that mining profit or loss is defined as mining revenues net of costs for energy and hosting without considering depreciation for the deployed machines. Looking forward, as part of our strategic focus, we expect to grow our North America mining hash rate target to 10 exahash per second by the first half of 2025. Now, regarding expenses, our operating expenses totaled $27 million, decreasing 44% year-over-year and 11% quarter-over-quarter. Staff costs, including share-based compensation, decreased 36% year-over-year and 11% quarter-over-quarter, primarily driven by organizational optimization performed in Q4 last year. As mentioned in Q1, we chose to early adopt the FASB's new accounting rules on cryptocurrency assets since January 1, 2024, allowing cryptocurrencies to be carried at their fair market value. The price of Bitcoin decreased to around $62,000 on June 30, down from about $70,000 on March 31, leading to a loss on crypto assets of $10 million during Q2. However, combining our prior quarterly gain of $34 million with the current loss, we still achieved a year-to-date gain of approximately $24 million. Benefitting from the large-scale deliveries of the A14 series, coupled with ongoing spending control, our Q2 operating loss narrowed by 61% year-over-year and 32% quarter-over-quarter to $47 million. Despite a $10 million loss on the fair value of our critical assets, our Q2 net loss narrowed by 62% year-over-year to $42 million, and adjusted EBITDA loss narrowed by 61% year-over-year to $31 million. Turning to our balance sheet and cash flow, in Q2, we generated $74 million in cash inflow from sales, along with $19 million from secured loans and $7 million from export VAT refunds. We paid $40 million to secure our wafer supply and $48 million for production and operations to enable concentrated deliveries and ongoing sales of our products in the following quarters. Consequently, at the end of Q2, we held $67 million in cash, indicating a 22% increase compared to the first quarter's end. Moving to our contract liability, the A14 series continues to be popular, and we received some pre-sale orders for the A15 series from listed mining companies. The balance of contract advances reached $51 million at quarter's end, up 30% from $39 million the previous quarter. Additionally, we recorded an account receivable of $8 million, mainly consisting of installments from public listed customers in North America. We will continue to evaluate market demand and adopt corresponding credit policies with caution. Now, looking into our Bitcoin assets, the Bitcoin we held as our own assets grew this quarter, reaching a record high of 1,114 Bitcoins as of June 30, an increase of 57 Bitcoins since last quarter. On June 30, the fair market value of our owned Bitcoins totaled around $70 million. In this quarter, we pledged 530 Bitcoins for long-term secured allowance with an aggregate carrying value of $19 million at a reasonable interest level. This secured allowance enables additional liquidity for our production expansion and operations. In the future, while adhering to our strategy, we will explore further ways to increase capital liquidity through our owned crypto assets. Our Q3 revenue expectation stands at $73 million. We have successfully navigated the halving challenge and continued to enhance investment in both product development and supply capacity. We will focus on meeting the diverse needs of our customers with an even more comprehensive and efficient product selection. This concludes our prepared remarks, and we are now open for questions.

We will now begin the question-and-answer session. As a courtesy to other investors and analysts who may wish to ask a question, please limit yourself to three questions at a time. If you have any follow-up questions after the Q&A session, the Investor Relations team will be available after the call. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English.

Good morning, NG and James, or it’s afternoon over there. Thanks very much for having me on the call. I was wondering if you could give us your perspective on the inventory situation throughout the industry?

Thank you, Kevin. Maybe I take this one. I think the inventory level in Q2 actually eased a little compared to Q1 because the customer demand after halving boosted. A lot of customers tried to upgrade their mining machines, which created the first wave of demand. That means that existing customers wanted to upgrade their machines. They placed orders, some for contract sales in last year’s Q4 or Q1, while others placed orders in Q2 directly for current sales. Thus, the inventory situation changed to a slightly more optimistic one. However, many competitors are still holding a significant amount of inventory.

Thank you, James. I saw that your price per terahash stepped up very nicely from the March quarter, which I would expect was because you were selling more A14 series. But I was just wondering if you could talk a little bit about the overall pricing trends and how you see that affecting demand?

I think that demand and supply are always the most critical factors in our industry to determine market prices. We had a wave of demand for upgrading machines, but the prices still remain in the bottom range because both new and older generation products are selling at relatively low prices. I expect if the Bitcoin price experiences rapid growth in the coming months, it will drive demand up, bringing newcomers from the energy sector into our industry. This would lead to huge demand far beyond our supply capacity since we have to secure wafer supply six months before shipment. So, while we have seen some growth in demand, the prices remain suppressed by industry-wide conditions. If Bitcoin has significant upside, we will see a corresponding increase in machine prices.

Yes, thank you very much, James. I really appreciate the optimism. Congratulations, NG and James, for a very nice quarter and the strong improvement and all the hard work.

Thank you, Kevin.

Thank you. Our next question is from Shuang Sun with Guosheng Securities. Please go ahead.

Is the company considering shifting power usage for self-mining to supply electricity for AI service providers?

Hello, this is NG. I think at present we have no plans to shift the electricity use in our mining operations to AI service providers. Our primary focus remains on optimizing our mining business. Our mining operations feel relatively small, and the returns from Bitcoin mining are more predictable and manageable for us, making it a worthwhile investment. However, we will continue to evaluate all potential opportunities and strategies to ensure our best performances.

On August 8, the NASDAQ stock exchange announced on its official website that it is considering changes to its rules regarding penny stocks to create faster and stricter delisting procedures for companies with stock prices below $1 per share. Does the company think this potential policy change will affect it?

Thank you, Shuang Sun. I think we saw the proposed regulation, which relates to lengthy discussions from proposal to final approvals. We will continue to monitor the dynamics of these proposals closely. Even if the proposal is eventually passed, we believe it would have little impact on our company. The proposed amendments include two key points. First, if a company's stock price remains below $1 for 360 consecutive trading days, the stock will be suspended from trading on NASDAQ and moved to the OTC market. Even during this process, the company can appeal to a hearing panel. The second point is that if a company raises its stock price through a reverse stock split and the price falls below $1 within a year, NASDAQ will issue a delisting notice, although the company can still appeal and continue trading for 180 days. This means that even if these amendments are approved, our stock can stay below $1 for up to 360 trading days or fall below $1 after a reverse split before facing delisting. We can focus on our operations and strive for improved financial performance. In Q2, the operational trend returned to growth, revenue doubled from Q1, and our operating loss narrowed significantly. So from our perspective, while the recent stock price is mainly influenced by the overall decline in the US capital market, we believe that factors like beneficial operational trends can lead to a stock price repair.

Thank you.

Thank you. Our next question comes from Bill Papanastasiou with Stifel. Please go ahead.

Good morning, gentlemen. Thank you for taking my questions and congrats on the sequential growth this quarter. For my first question, I was just hoping you could provide an overview of the manufacturing landscape today, where market share currently sits, and how Canaan looks to gain market share in the near to medium term relative to some of your peers.

Okay. I think the key to increasing market share lies in our products. We continue investing in R&D to deliver superior products. Compared to a year ago, our product portfolio is now more diverse. Our A14 series is undergoing spot deliveries during the second and third quarters of this year. In May, we launched the new A1566 mining machine, offering an average computing power of over 180 terahash per second with power efficiency of 18.5 joules per terahash, and its performance is on par with competing products. In June, we introduced the liquid-cooled model, the A1566I, achieving a computing power of 249 terahash per unit. Furthermore, we have consistently shared our R&D roadmap with our customers and partners. Our 10 plus joules per terahash products are on track for design completions and mass production in the first half of next year. We also aim to offer one-stop customized mining solutions through comprehensive product offerings and launched Avalon Nano 3, entering the consumer market. Building a comprehensive sales system to cover various customer types through a multi-channel approach is crucial, alongside dedicated marketing and promotion efforts. For large clients, we've partnered with several North American listed mining companies and are in talks with more. In the retail space, the computing power demand is high but scattered. We see positive results from combining our e-commerce platform with distributors to reach these customers. Additionally, we've established mining demonstration products in regions like the hot Middle East, serving as showcases to attract potential local customers. However, we acknowledge that our coverage of mid-sized customer groups is still lacking, representing a key growth area moving forward. Finally, we commit to integrity, believing strongly in the power of reputation. By continuing to offer value to our market and customers, we anticipate receiving recognition and rewards.

For my second and last question, we're just hoping to gain insight into the recent announcement by the Russian government to legalize cryptocurrency mining in the country. Could we expect to see a similar move by China? What are your general thoughts on this announcement by the Russian government, given your experience with mining in the region?

As a US-based company, we do not conduct business in Russia and have no plans to do so, considering compliance and reputation. In our mining operations, we employ a diversified quality management strategy, continuously assessing the economic returns from various mining collaborations and adjusting project layouts accordingly. We will prioritize regions with energy advantages and place greater emphasis on the legal framework and policy stability of the regions to ensure robust risk management and protect our company's assets.

I appreciate the insights and look forward to another quarter of strong growth in Q3. Thank you.

Thank you. As there are no further questions now, I'd like to turn the call back over to the company for any closing remarks. I'm sorry. It looks like we do have a question from Kevin Dede with H.C. Wainwright. Please go ahead.

Thank you. Hi, James. Hi, NG. Since we had a couple more minutes, maybe you could talk about your plan to expand to 10 exahash in the U.S. Is that site acquisition or a partnership? How do you plan on building that?

Yes, we have some ongoing negotiations with corporate partners in the US and a few of them. We will announce the details once we finalize the arrangements.

Yes, it's still early to discuss the details, Kevin.

Yes, but for sure we will announce the details for that.

Understood. Thank you, gentlemen. I just thought I'd throw that out there, because it seems like an impressive goal. So again, thank you very much, and congratulations on the results.

Thank you, Kevin.

Thank you, Kevin.

Thank you. As there are no further questions now, I'd like to turn the call back over to the company for any closing remarks.

Thank you once again for joining us today. If you have further questions, please feel free to reach out to us through the contact information provided on our website.

Thank you. That does conclude today's call. Thank you, everyone, for attending. You may now disconnect.