Lucid Group, Inc. Q3 FY2024 Earnings Call

Ladies and gentlemen, thank you for your patience, and welcome to the Lucid Group Third Quarter 2024 Earnings Conference Call. Please note that this conference is being recorded. We will have a question-and-answer session later. I would now like to hand the call over to your speaker for today, Maynard Um, Senior Director of Investor Relations. Please proceed.

Thank you, and welcome to Lucid Group's third quarter 2024 earnings call. Joining me today are Peter Rawlinson, our CEO and CTO; and Gagan Dhingra, our Interim CFO and Principal Accounting Officer. Before handing the call over to Peter, let me remind you that some of our statements on this call include forward-looking statements under federal securities laws. These include, without limitation, statements regarding the future financial performance of the company, production and delivery volumes, financial and operating outlook and guidance, macroeconomic and industry trends, company initiatives, and other future events. These statements are based on predictions and expectations as of today and actual events or results may differ due to a number of risks and uncertainties. We refer you to the cautionary language and the risk factors in our most recent filings with the SEC and the forward-looking statements on Page 2 of our investor deck available on the Investor Relations section of our website at ir.lucidmotors.com. In addition, management will make reference to non-GAAP financial measures during this call. A discussion of why we use non-GAAP financial measures and information regarding reconciliation of our GAAP vs non-GAAP results is available in our earnings press release issued earlier this afternoon as well as in the investor deck. With that, I'd like to turn the call over to Lucid 's CEO and CTO Peter Rawlinson. Peter, please go ahead.

Thank you, Maynard. And thank you, everyone, for joining us on our third quarter 2024 earnings call. Now, before I get to the third quarter results, I'd like to start by thanking all our employees, suppliers and partners for their support and hard work. I'd also like to thank our investors and the Public Investment Fund for their continuous support and partnership. Last month, we raised approximately $1.75 billion through a public offering of common stock of approximately $719 million and a corresponding pro rata investment by an affiliate of the Public Investment Fund of approximately $1.026 billion. This additional capital gives us sufficient financial runway into the ramp of Lucid Gravity and indeed well into 2026. Now, the raise is consistent with our strategy. We have said that we've continued to be opportunistic based upon the market and we delivered this with strong support from the Public Investment Fund as well as other institutional investors. So, turning to third quarter results, we had another quarter of record deliveries with the momentum in the first half of the year continuing into the third quarter. We delivered 2,781 vehicles, up approximately 91% year-over-year and up 16% sequentially, outperforming what is typically a seasonally softer period for the industry. In September, in the U.S. market, the Lucid Air not only outsold many of the largest and most storied brands in the industry within our competitive set of electric vehicles, but we also outsold many of the competitive sets in the gas market as well. I think our momentum is quite notable and I believe a part of this is due to Lucid's growing brand awareness, which is reaching an all-time high in the third quarter since we started tracking this metric. While I believe we still have much more opportunity to grow our brand awareness, we're making very good progress and I think you can see this in our delivery numbers. The number of vehicles on the road continues to grow and I'd like to thank our loyal customers who are our biggest advocates. You are a key part of our success and I'd like to extend my sincere gratitude. Turning to production, we produced 1,805 vehicles in the third quarter and are on track to produce approximately 9,000 vehicles for the full year 2024. I'm delighted with the progress we've made with vehicle inventory and will continue to manage this judiciously. That said, I would expect an increase in production in the fourth quarter. I'm also pleased by the progress in our planned cost optimization programs at the Arizona factory. In the third quarter, we transitioned our battery enclosure manufacturing and various subassemblies on site, and we're transitioning powertrain manufacturing to be fully on-site. We expect this will not only have a number of cost benefits, including logistics, but should also help the efficiency of the factory when fully integrated. We held our technology and manufacturing day at the Arizona factory on September 10th to demonstrate our technology leadership and cost-effectiveness and to show off our Lucid Gravity SUV. The day was purposefully structured to not only highlight our technology advantage but also critically a cost competitiveness, referencing data from a widely respected and objective third-party company that specializes in this type of analysis. We also demonstrated how our advanced technology translates into vehicle comfort and performance with closed course test rides of Lucid Gravity Beta and pre-production vehicles, as well as the Lucid Air Sapphire zero to sixty launches. Now, I think those who have had the opportunity to test ride the Lucid Gravity would agree that the drivability is more akin to a sports sedan than a traditional SUV. The Lucid Air is the best car I've ever driven, but the Lucid Gravity may well be the first SUV I'm genuinely looking forward to as my daily driver. We've also opened the Arizona factory to show Phase 2 to analysts for the first time, highlighting the high levels of automation and significant areas of cost savings that we have and will be able to realize. Turning to software, on our last quarter's earnings call, I promised we would release over-the-air software updates, substantively enhancing our advanced driver assistance system (ADAS), and we delivered with a number of over-the-air updates in the third quarter, including Lucid UX 2.4 package, which introduced many enhanced features such as Lane Change Assist, Active Curve Speed Control, and extended Stop and Go. The UX 2.4 also introduced our new Lucid Assistant, our new in-cabin invoice assistant, as well as user interface upgrades. Last week, we started deploying via an over-the-air software update, Lucid UX 2.5, which adds an innovative curb brush assist feature, warning the driver of the Lucid Air before all wheels scrape the curb. We also upgraded the performance of our audio systems for improved response and performance. Now these are further examples of how we continue to bring tremendous value to the vehicle long after a customer's purchase. The software team is invigorated and we have much more in store. In the very near future, we are targeting the release of an over-the-air software update that will enable hands-free Highway Assist. Watch this space; I believe the roadmap is robust and I think customers are really going to love it. I'm also delighted to announce that Lucid Air earned the highest possible overall safety rating of five stars from the National Highway Traffic Safety Administration's New Car Assessment Program. This is the government's premier customer information program for evaluating vehicle safety. The Lucid Air Pure, Touring, Grand Touring, and Sapphire received the maximum five-star scores for overall safety in frontal crash, side crash, and rollover testing. This follows the highest possible European rating of five stars for the Lucid Air in the rigorous Euro NCAP crash testing process. We worked diligently on making the most advanced electric vehicle enabled by a clean-sheet design and engineering with the goal of securing the highest possible safety ratings. First, safety has been a top priority from the outset at Lucid, and achieving five stars in NHTSA's New Car Assessment Program should give owners even more confidence in the Lucid Air. So, we have much to celebrate this quarter and thus far throughout the year. I think our progress through the first three quarters of the year is a testament to our tremendous progress. Turning to the Lucid Gravity, I'm delighted to announce that we opened orders and pricing today. Our configurator is now live. Customers are telling us they are keen to get behind the wheel of Lucid Gravity and we know there's an incredible amount of interest. For example, we have Lucid Gravity Roadshow events in our studios across the country, and in those studios, we saw foot traffic increase more than 70% versus the prior 30 days. I think certainly the Lucid Gravity is having a positive effect on the Lucid brand and is also helping to raise awareness of the Lucid Air. The scheduled start of production is just a number of weeks away, and I think very soon we'll be in a position to announce when we might be able to make the very first deliveries. On the technology licensing front, we remain actively engaged in discussions. You can see that the industry has become more active. However, to my knowledge, many of the announcements we've seen in the industry don't appear to be binding. My philosophy is that announcements should be of greater binding substance because you can lose a significant amount of leverage if you announce something well before the details are set. So, all I can say is to watch this space. In closing, I'm very encouraged by the progress and momentum that we're having with the Lucid Air. I believe that the Lucid Gravity is coming at an opportune time as the momentum and brand awareness has been building. All the elements that make the Lucid Air a success are coming to the Lucid Gravity. I believe this innovation has the potential to reshape the market for SUVs with a meaningful opportunity to scale in a significantly larger addressable market. In technology licensing, I believe our technology is even more relevant today than it has ever been. Our Atlas Drive Unit technology for mid-size addresses a significantly larger market. We're also realizing the benefits from our cost optimization programs, and we've identified further opportunities. Perhaps, cost transformation is a more appropriate nomenclature, as we're instilling this into our very DNA of the company, and we will tactically reprioritize some benefits into areas of strategic growth like Lucid Gravity and the Atlas Drive Unit and the mid-size platform. Lastly, I'd like to thank all of our employees, our suppliers, our customers, our strategic partners, and our investors for your hard work and your support. I look forward to updating you on our progress in the future. And so, with that, I'd like to send it over to Gagan Dhingra to provide an update on our financials. Gagan?

Thank you, Peter. And thank you to those who are taking the time to join us today. Before I get to my prepared remarks, I would also like to start by thanking the entire Lucid team for the hard work. The significant achievements and progress we have made is a direct result of your efforts. Turning to our 2024 third quarter financial results. During the third quarter, we produced 1,805 vehicles and we reaffirm our guidance to produce approximately 9,000 vehicles this year. More importantly, deliveries of 2,781 vehicles were yet again ahead of expectations in the third quarter, up approximately 91% year-over-year and more than 16% sequentially. As Peter mentioned, we are pleased with the demand we have been experiencing thus far. Deliveries outpaced production in the quarter as we further managed to work down weekly inventory. We reported revenue of approximately $200 million in the third quarter, up 45.2% year-over-year, and flat sequentially. The average selling price was down sequentially, primarily due to product mix. For those who are calculating average selling price by taking revenue and dividing it by total deliveries, please note that 8% of deliveries were subject to operating lease accounting and the revenue recognized for those vehicles was immaterial in the third quarter. Cost of revenue in the third quarter was $412.5 million, and the lower of cost or net realizable value impairment was $154.9 million. GAAP gross margin improved by 28 percentage points sequentially and better than the directional guidance we provided of being down sequentially. Also, last quarter, we called out a special provision related to a warranty campaign that impacted the second quarter gross margin. Excluding that campaign, our third quarter gross margin still would have improved by approximately 11 percentage points. The primary reason for the improved gross margin was a result of continued cost reduction initiatives. As we look into the fourth quarter, we expect gross margin to be largely flat. As we highlighted at our technology and manufacturing day in Arizona, we believe our technology and increased scale will be key enablers of our gross margin, and the forthcoming inclusive gravity ramp will be a key driver. Now moving to operating expenses. R&D expense in Q3 totaled $324.4 million, up 13% sequentially, the increase was primarily due to higher stock-based compensation expense, which we called out on our last quarter's earnings call, as well as costs related to the Lucid Gravity and the run-up to start of production. SG&A expense in Q3 was $233.6 million, up 11% from Q2. The sequential increase was primarily due to higher stock-based compensation expense, again, as we called out on our last quarter's earnings call. As we guided previously, we expect our full-year 2024 operating expense to decrease as a percentage of revenue compared with 2023. We ended the third quarter with 55 studio and service centers, excluding our temporary and satellite service locations, up from 53 in Q2. On the service side, we ended Q3 with 72 mobile units in the fleet and 118 approved body shops worldwide. We plan to continue to strategically expand our studio and service center footprint as well as satellite service centers, which will cost-effectively provide additional locations as well as ensure high customer satisfaction as we continue to grow. Our stock-based compensation expense in the quarter was $88.1 million compared to $58.5 million in Q2. In Q3, we recorded a loss of $221.5 million in other expense, which mainly included a non-cash loss of approximately $240 million, driven by an increase in the fair value of derivative liabilities associated with our redeemable convertible preferred stock. This was mainly due to the increase in our share price at the end of the third quarter compared to the prior quarter. The adjusted EBITDA loss was $613.1 million compared with $647.6 million in Q2. The improvement was largely driven by improvements in gross margin. GAAP net loss per share in Q3 was $0.41, and non-GAAP net loss per share was $0.28. The difference was primarily related to the change in fair value of derivative liabilities associated with our redeemable convertible preferred stock. Moving to the balance sheet, we ended the quarter with approximately $4.03 billion in cash, cash equivalents, and investments, and total liquidity of approximately $5.16 billion. As Peter mentioned, in October, we raised a total of approximately $1.75 billion through a public offering of common stock and a corresponding pro rata investment by an affiliate of the Public Investment Fund. I would also like to thank the Public Investment Fund for their incredible partnership and support. We remain committed to maintaining a healthy balance sheet to execute on our strategic vision and will continue to be opportunistic in exploring financing. Turning to inventory, total inventory was essentially flat sequentially as finished goods inventory was offset by the buildup of raw materials we spoke about last quarter. CapEx in Q3 was $159.7 million. Moving to the outlook for 2024, we reiterate our 2024 production guidance of approximately 9,000 vehicles, and we expect total liquidity inclusive of the recent $1.75 billion capital raise will give us sufficient runway well into 2026. Moving to CapEx. We are updating our 2024 CapEx guidance to approximately $1 billion from our prior guidance of $1.3 billion. This mainly reflects decals in our capital outlay into 2025 and certain savings as part of our cost-reduction initiatives. From a product perspective, the Lucid Gravity start of production is scheduled for late 2024, and the start of production of our high-volume midsized platform is scheduled for late 2026. In closing, I think our performance this quarter demonstrates the significant progress we have made with our cost transformation initiatives and our go-to-market and brand awareness. We will continue to maintain a disciplined approach to managing cost while strategically investing to drive growth. Looking ahead, I want to emphasize our excitement about the upcoming launch of the Lucid Gravity. Thank you to our investors and stakeholders for your continued trust and support. Together, we hope to make this next effort one of our most successful yet. With that, let me turn it back to Maynard to get your questions.

Thanks, Gagan. We'll now start the Q&A portion of the call. Before we take questions from those on the phone, I want to pose some questions that our retail investors sent in through the Say Technology platform. The first question comes from Paul C., with the share price still hovering at all-time lows. What do you have to say to early investors that believed in the company and its path? What do you plan to do to improve the share price as more funding is needed? Can you protect shareholder value? And there's another question somewhat related to this from Ryan P. that asks, what does the future of the company look like that is similar that we'll put together.

Yes, indeed. To start with, thank you so much for your support and your belief in the company. We deeply appreciate your commitment. I want to assure you that we're taking significant steps to deliver long-term shareholder value. That's what it's all about. Now, that said, market conditions have been challenging and a number of factors, some of which were beyond our control, have undoubtedly impacted our share price. However, we remain confident in our strategic direction and the long-term potential of our business. This is a long-term play, and we are actively working on several initiatives both to drive growth and to improve our financial performance, which you can see in our record deliveries and the progress and improvement in our gross margins. You're seeing that already. The Lucid Air is widely recognized as the best car in the world, and that recognition has been growing in EV over the last few years. We've created what is now widely recognized as the best driver assistance technology in the world. We've shown how this technology becomes a cost-down driver in the long term. We're growing scale, and our profitability depends largely upon that scale. We're already outselling many of the storied brands in both EVs and gas cars. This is something that is not sufficiently recognized. Today, we opened orders for Lucid Gravity, and we've entered a market that's about 6 times larger than our addressable market last year with Lucid Air. Gravity is a revolutionary new class of SUV conceived from the ground up without compromise. Remember, we'll follow this with a high-volume midsize platform scheduled for startup production in late 2026. I really think that's going to be a huge product for us. We also focus on our technology access and licensing business and the Atlas Powertrain, which suits mid-sized vehicles. That's the new powertrain that I recently announced. Work on that is well underway already, and I see huge licensing potential in a significantly higher volume market with Atlas. Collectively, these efforts are designed to enhance our competitive position and to deliver long-term value to our shareholders. Gagan, have you got anything to add here?

Yes, thanks, Peter. Regarding funding, I think we have been transparent with the market that we would be opportunistic when it comes to capital raising. We are committed to maintaining a strong financial position and ensuring that our actions align with the best interest of our shareholders. We remain dedicated to enhancing shareholder value through improved operational efficiency, increased profitability, and sustainable growth. We believe that our strategic initiatives will position us for success and drive long-term value for our shareholders.

Indeed, maybe I can add a bit of flavor here. As a major shareholder myself personally, believe me, nobody is more incentivized than me for success. What's less known, I relate to you all because I put so many of my own savings into this company to make it happen. Many of you may not be aware of my funding role in the company as we know it today. I joined this company over 10 years ago with the goal of making the best electric vehicle and to drive a revolution towards sustainable transportation. My mission and commitment are steadfast. I've not sold a single share of this stock except what was necessary for tax purposes. I am directly tied to the company's performance as a shareholder more than virtually anyone else. My promise is to continue to tirelessly work day and night to drive that long-term shareholder value. This is a long-term play and it is a tech play.

Thank you. We'll go to the second question from Skylar. Do you plan to offer a more affordable vehicle? If so, what's the timeline?

Oh, absolutely. This has been on our vision, our mission, our schedule for many years now. We're not here to be just a niche player. This is so misunderstood. Lucid exists to make a meaningful impact on the planet. To do that, we need scale. To get that scale, we need to bring our price down. Our midsized vehicle is scheduled to start production in late 2026. The work is well underway. In our technology and manufacturing day presentation, we showed, in September, we already gave a sneak peek of one version of this midsized vehicle. We estimate the total addressable market to be about 30 times larger than our market last year. This product we're targeting should be in the range of $48,000 to $50,000. The opportunity is vast.

Great. Our next question is from Malik H. What are the chances of the Saudis buying out Lucid completely? Will Lucid go private, and what does this mean for the investors?

Thank you, Malik, for the question. Of course, I can't speak on behalf of the Public Investment Fund. However, what differentiates us as a company are two things: our world-leading technology and the long-term partnership with the Public Investment Fund. They continue to be fantastic partners, and I am hugely grateful for their support. They stood shoulder-to-shoulder with us and have enabled this to happen. We are driven by our mission and ambition to drive long-term shareholder value through our strategic growth and cost transformation initiatives. Let's not forget that.

Okay. Our last question we'll take is from Paul C. Can you reach positive margins individually on Air and Gravity? What sales volume would be needed to achieve this for each?

Yes, we see a pathway to positive margins individually on Air and Gravity. We are making good progress and improvements in gross margin. We have a lot of fixed costs in our cost of goods sold related to our factory. In addition to lowering the cost to build a vehicle, we need a level of scale to get above our fixed costs. We have been heading in the right direction with the Air, and we expect Gravity to drive even further scale. There's very high reuse of the powertrain technology in Gravity that we use in Air. To add a bit of color here, it's important to realize that we've got about 95% reuse across from Air to Gravity. The battery modules are virtually the same. The pack layout is very slightly different, and we use the same motor and inverter technology with a slightly different gear ratio to get the tractability for a true SUV. We've created a different platform architecture for Gravity from Air, and we've done that in just three years. I don't think anyone's been able to do that. We are not constrained by the boundaries of a platform designed for a sedan, and that means we're able to get incredible distinct product differentiation across from Air to Gravity. Lucid Gravity provides the interior space and practicality of a full-size SUV within the exterior footprint of just a mid-size SUV. Using a different platform allows for a great design and efficiency. We're able to design a vehicle with a greater cost lens than if we were just to simply try to reuse the entire Air platform.

Now, we'd like to take questions from the phone lines. Liz, can we go to the first question, please?

Your first question comes from the line of John Murphy. Please go ahead.

Peter, just a first question. As you work through the greater proportion of mix being pure and taking some price action on the Air, what lessons are you learning regarding the price elasticity of demand? It seems interesting that you might be taking a slightly more conservative view or being favorable from the consumer side on the Grand Touring on the Gravity because it's about $15,000 less than the Grand Touring on the Air. What lessons are you learning there, and what impact could this have on the Gravity ramp as opposed to what happened with the Air?

Yes, John. I think the pricing structure of Gravity is an absolutely super value proposition. If you look at the fully loaded Gravity Grand Touring on our website now, it actually comes in at lower than the entry price of a big electric SUV being launched now by one of our competitors in the big three. This demonstrates what a compelling value proposition that is. And we can achieve this because we have so much carryover content from our powertrain technology. Additionally, we are able to achieve over 440 miles of range with virtually half the battery size compared to that of a competitor, which gives us a bill of materials advantage of around $14,000 to $15,000. This means not only a better value proposition to our customers but operational cost savings as well.

And then, if I could ask a second question. I apologize for skipping over Gravity to some degree and trying to get to the midsize. When you think about the commonality between the Air, the Gravity, and whatever the name will be on the midsize, what are the reuse potentials there? How much of your resources are being focused on that midsize?

If you look at some of our core technology, all our expertise in battery management, system control logic, traction control, stability control, motor control—all of that is directly transferable. Our infotainment technology suite, ADAS, and much of our core software expertise is also directly transferable. In terms of motor technology, we're taking our best learning from the Zeus program and transferring that into Atlas. Atlas is focused on being an ultra-affordable version of Zeus. We are also working on next-generation battery technologies and a completely new architectural design aimed at reducing the bill of materials cost for high volume. We will use different high-volume processes and focus on making the factory a cost-down driver.

The next question comes from the line of Andres Sheppard with Cantor Fitzgerald. Please go ahead.

Good evening. Congratulations on the quarter, and thanks so much for taking our questions. Peter, I'm wondering if you have a sense or an idea of what kind of unit mix you anticipate for next year with the Gravity ramping up in terms of the Air and the Gravity? Just curious how to think about that for next year? Thank you.

We've started with a high-end product first, the Gravity Lucid Gravity Grand Touring. We believe there is huge latent demand for that. We anticipate that later in 2025, we will bring out the Lucid Gravity Touring, starting at $79,900. The Grand Touring is starting at $94,900, which I think is a compelling price point for the product with over 440 miles of range and high performance. I think there is huge latent demand for the Grand Touring. Previously, we were market-constrained with our build-for-air. I anticipate we'll be manufacturing-constrained next year as we ramp-up for Gravity. We need to ensure quality and take a prudent approach to meeting customer expectations during that ramp-up.

Thank you for that color. I want to touch on the customer agreements with the government of Saudi Arabia for the up to 100,000 vehicles. You've alluded to the fact that the majority of the deliveries for this contract will be the Gravity and the midsized platform. Do you foresee a significant ramp-up in deliveries to Saudi Arabia as Gravity ramps next year?

What we've stated is we anticipate a natural distribution of those deliveries based upon a price point. Gravity will be the perfect vehicle for the Middle East because of its all-wheel drive capabilities and traction control operating under low-grip and sandy conditions. I believe it is what the market has been waiting for. Early builds of Gravity are expected to head for Saudi Arabia next year.

Your next question comes from the line of Stephen Gengaro with Stifel. Please go ahead.

Good evening. Thanks for taking the questions. I have two from me. First, as we think about Gravity and its production ramping up, how should we consider the gross margin impact? It seems like an initial headwind, then improvement as you increase volume. What are your thoughts on this?

As Peter mentioned earlier, we are already applying our learnings from Air to Gravity. We feel very confident that our cost reduction and technology efforts will allow Gravity to better contribute to our gross margin as we scale.

Thank you. As a high-level question regarding your capital needs and timing of capital raises, how do you balance deciding when to raise capital versus waiting on needs?

We recently raised nearly $1.75 billion, which secures the future of the company and affords us a financial runway through 2026. In 2024, we've raised well over $4 billion in what has been a brutal market. This demonstrates how we can buck the trend because there's a recognition of the value of our technology. It makes perfect sense to raise capital opportunistically. And I've always said you want to have a runway of at least a year. We are very pleased we've managed to secure capital when others have not. This is super positive news for the company.

Your next question comes from the line of Steven Fox with Fox Advisors.

Hi, good afternoon. I have two questions as well. First, what are the working capital implications as you ramp Gravity next year?

From a working capital perspective, we will provide more color during our Q4 guidance for the full year of 2025. We typically cover color on gross margin and OpEx along with CapEx during that time.

What thresholds need to be crossed with two models out before we have confidence to ramp a third type of vehicle, or will it just depend on the funding available?

Work on the midsize is already underway; a significant portion of our engineering and powertrain teams are focused on this project. The factory to build the midsize in Saudi Arabia is making good progress. Scaling will depend on increasing sales of the Air, increasing demand for Gravity, and sustaining our technology licensing opportunities.

Your final question comes from the line of Tobias Beith with Redburn Atlantic. Please go ahead.

Gagan, the write-down for inventory was flat sequentially, indicating that the new stock purchase had impaired less, suggesting underlying vehicle profitability was better. Can you confirm this and expand on your cost efficiency efforts?

What you said is absolutely correct. As we are getting better on our cost, the impairment on new inventory is getting better. We have clear targets for our cost reductions and our technology advancements will drive significant efficiencies moving forward.

Just to follow up on that, how far are we away from realizing cost savings from logistics and where do you need to make some tougher decisions?

Our journey is ongoing. We have identified targets for the end of this year, next year, and beyond. We will implement significant efforts on cost reductions. Our technology will help bring our costs down, and all our fixed costs per vehicle will significantly decrease as we grow scale.

When we say Gravity uses a different platform than Air, we mean we aim for significantly more product differentiation to avoid cannibalization. Gravity has its own design and engineering despite sharing many core components. Our focus is on meeting the demands of a true SUV, and we're achieving that through our engineering capabilities and innovative design without compromising quality.

Thank you for joining us today. This now concludes Lucid's Third Quarter 2024 Earnings Conference Call. Thank you.

Thank you, everyone, for joining. You may now disconnect.