Earnings Call Transcript - PSNL Q1 2021

Operator, Operator

Good day and thank you for standing by. Welcome to the Personalis First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Ms. Caroline Corner, Investor Relations. Please go ahead.

Caroline Corner, Investor Relations

Thank you, operator. Welcome to Personalis’ first quarter 2021 earnings call. Joining me on today’s call are John West, President and Chief Executive Officer, and Aaron Tachibana, Chief Financial Officer. This call will include forward-looking statements, including statements regarding the markets in which we operate, including potential market sizes; trends and expectations for products, services and technology; trends and demand for our products; Personalis’ expected financial performance, expenses and position in the market; and the impact of COVID-19 pandemic on our operations and our customers’ operations. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our current expectations. We encourage you to review our most recent filings with the SEC, particularly the risk factors described in our 10-Q for the first quarter of fiscal year 2021, filed today, and our 10-K for fiscal year 2020. The forward-looking statements we provide during this call, including expectations for future performance, are based on our reasonable beliefs and expectations as of today. Personalis undertakes no obligation to update these statements, except as required by applicable law. Please note that in these prepared remarks, Personalis management will refer to the company's oncology business, which includes all biopharma and all other customers, excluding the VA MVP, most of whom use Personalis services for applications in oncology. When referring to population sequencing, we are referring to the VA MVP, or other potential customers within this market. Our press release with our first quarter 2021 results is available on our website, www.personalis.com, under the Investors section and includes additional details about our financial results. Our website also has our latest SEC filings, which we encourage you to review. A recording of today’s call will be available on our website by 5:00 P.M. Pacific Time today. Now, I'd like to turn the call over to John for his comments on first quarter business highlights.

John West, CEO

Thank you, Caroline. Personalis has continued to grow. We achieved another overall revenue record during Q1, marking our 19th consecutive quarter of growth. Our oncology business has received orders well above revenue levels since Q3 of 2019 and has increasingly seen the resulting backlog turned to revenue. In Q1, our revenue from this business grew 74% over the same period of the prior year. New orders in Q1 again significantly exceeded revenue, and so far in Q2, we expect that trend to continue. The strategy of our oncology business is to support drug development at the forefront of cancer biology. That strategy is working. In our population sequencing business, we have now received all of the samples required to complete our current orders, positioning us well through Q3. We have also engaged with the VA MVP regarding options for a further order under our existing contract with them, which expires in August of this year. We are optimistic that our relationship with the VA MVP will not only continue but broaden, in part by leveraging capabilities initially developed on the oncology side of our business. Given all of this progress, we will now resume providing full year guidance reflecting our improved visibility. Our mission is to help cancer patients live better and longer lives, and we've developed our ImmunoID NeXT Platform with this objective in mind. The NeXT Platform provides our pharmaceutical customers with the capability to better understand a cancer patient's genetic profile, which can aid in drug development, therapy selection, and ongoing monitoring of the tumor to help detect recurrence. We believe that to better understand a cancer patient's tumor, both tissue and liquid biopsies together can provide a comprehensive view leading to optimal therapy and treatment decisions. Both tissue and liquid biopsy offerings have been designed specifically to meet the needs of our pharmaceutical customers and provide data on approximately 20,000 human genes. We expect our oncology revenue to become a larger part of our total mix in the future as we leverage our ability to analyze both tissue and liquid biopsy samples with these platforms. Tissue samples give us access to RNA and the immune cells that have infiltrated a patient's tumor. By analyzing liquid biopsy samples, we provide information about a patient's tumor over multiple time points. Together, we believe our oncology platforms provide our customers with the most comprehensive analysis for tumor burden and biomarker identification available today. We continue to execute well on our strategy, and later this year, we plan to expand our liquid biopsy offering with the launch of NeXT Personal, our Minimal Residual Disease, or MRD, offering designed to track changes in a specific patient's tumor. We have begun processing customer provided samples to ensure our product development meets customer requirements and are encouraged by these initial results. We believe that with the ability to monitor over a thousand mutations, NeXT Personal will compare favorably in terms of sensitivity and information content with panels from competitors that can only identify and track dozens or hundreds of mutations. We also believe NeXT Personal will be applicable to both pharmaceutical research and clinical diagnostic markets in the future. Now, I would like to provide six recent highlights and accomplishments from Q1. First, we continue to make encouraging progress with our exome scale NeXT Liquid Biopsy product. We launched this product in August 2020 and have received orders from several customers, delivering our first customer order. Based on that data, the customer has already requested us to process additional samples. We have our first publication authored jointly with one of our customers showcasing the utility of our NeXT Liquid Biopsy alongside our ImmunoID NeXT analysis of tissue from the same patients. We also presented posters showcasing the state-of-the-art results using NeXT Liquid Biopsy at the recent AACR Conference. We believe NeXT Liquid Biopsy will synergize with NeXT Personal when it releases, and that liquid biopsy-based products can increasingly contribute to revenue as we enter 2022. Second, we announced a collaboration with Natera to provide front-end tissue sequencing services based on our advanced NeXT exome. This will help them identify variants they will use to design their signature Personalis liquid biopsy test. Additionally, Personalis provides expert tumor tissue sequencing services to multiple liquid biopsy companies, leveraging our expertise in processing formalin-fixed paraffin-embedded or FFPE tissue for various cancer types. We expect our long-term growth to be driven by our products, including our own liquid biopsy products. These partnerships demonstrate how Personalis has established itself as a technological leader in our field, supplementing our revenue as we build our business. Third, we announced a collaboration with MapKure, LLC, a company jointly owned by BeiGene Limited and SpringWorks Therapeutics, Inc. We plan to use our NeXT Platform for their clinical trials and companion diagnostic development. This partnership underscores our technology's strength and capabilities, allowing us to showcase our genomic profiling platform in clinical settings, which we expect to assist with future regulatory approvals for our NeXT Platform of products and services. Fourth, our customer base has broadened significantly over the last year. We have received orders from a majority of the top 10 oncology-focused pharmaceutical companies, and since introducing the NeXT Platform in 2019, we have received NeXT orders from 50 different customers. In Q1, we added another large global pharmaceutical company as a customer, starting with an order of almost $1 million. This growth in the adoption of NeXT highlights the power of our platform and comprehensiveness that is important to our customers. Fifth, we highlighted our plans to establish a lab and commercial operations in the People's Republic of China and to partner with Berry Genomics. Our team continues building our laboratory in Shanghai and we are hiring additional employees. Customer engagement is very positive. Pharmaceutical companies must apply to the Chinese regulatory authority, HGRAC, for permission to include Personalis cells or biopsy samples from clinical trial patients in China. We are supporting the preparation of numerous applications and anticipate that HGRAC decisions could be received as early as Q3 this year. In several cases, these are international clinical trials for which Personalis has already received multimillion dollar orders to process samples in regions outside of China. We are also discussing potential uses of our NeXT Platform with various Chinese pharmaceutical companies in their clinical trials. We continue to expect our operations in China to commence in 2021 with moderate revenues ramping up in 2022. While this project will require time to significantly contribute to our top line, we consider it an important investment and look forward to updating you on our progress. Sixth, we recently announced the addition of Dr. Woody Myers to our Board of Directors. Dr. Myers has extensive healthcare industry experience and previously served as the Chief Medical Officer and Chief Healthcare Strategist at Blue Cross and Blue Shield of Arizona. He has also been active in government roles, serving as Physician Health Advisor to the United States Senate Committee on Labor and Human Resources, Health Commissioner for Indiana, and Commissioner of Health for New York City. Dr. Myers, received his MD from Harvard and his MBA from Stanford. He will play a crucial role in helping Personalis grow and scale in the future. I would now like to update you on the population sequencing aspect of our business, which is often referred to as population genomics. We are building a funnel of commercial opportunities and are in early discussions with several prospects. Initial discussions are going well and are encouraging. We expect to have additional customers and revenue from these new commercial opportunities in 2022. The VA MVP program represents the largest population sequencing effort in the United States, targeting enrollment of 2 million veterans, with over 825,000 enrolled so far. Personalis has contracted to sequence over 146,000 VA MVP samples, with approximately 29,000 remaining to sequence. We have been the sole provider for the VA MVP's whole genome sequencing project for over eight years and have received multiple contracts from the VA MVP during this time. Our existing contract with the VA MVP ends in August 2021, but the VA MVP can place additional orders with Personalis under our existing contract, and we are in active discussions with the VA about that. On our last earnings call, we expressed caution due to the ongoing pandemic. However, as we have had more discussions with the VA MVP, we have become quite optimistic that we will receive an order between now and the end of summer. We are also encouraged by the long-term prospects for the VA MVP. In early April, the White House released its fiscal year 2022 budget proposal, which we believe is a positive sign for continued funding for the VA MVP. The proposed budget includes $882 million for VA R&D, which was described as 'the largest year-over-year increase in recent history,' investing in research vital to Veterans' health. This represents a 12% increase in funding for VA research. In December, we announced we became the first profit company to sequence over 100,000 whole human genomes in the United States, a significant milestone for us. We expect this total to exceed 150,000 whole human genomes by the end of 2021, including population sequencing and cancer genomes. Our unparalleled experience and scale with the VA MVP position us well for new population sequencing opportunities. Given our clinical experience and collaboration with pharmaceutical companies, we see future opportunities to help transition population research to population health and involve pharma going forward. I would now like to expand on the synergy between the population sequencing and oncology aspects of our business, particularly those that extend beyond the more obvious operational and cost synergies. Our extensive experience with whole genome sequencing, combined with our deep expertise in cancer, has allowed us to launch whole genome sequencing from cancer samples. We believe this will be increasingly important, particularly for cancers such as breast and prostate, which have relatively low mutational burdens. Using our cancer whole genome technology can identify up to 20 times more somatic areas to serve as the foundation for Personalis cancer assays. We expect this will enable us to achieve high sensitivity, even in cancers with low mutational rates or those that have been surgically resected or shed relatively low amounts of cell-free DNA into the blood. We anticipate that this can lead to significant market opportunities and will provide updates as these product developments progress. In summary, I am proud that we have continued to show strong growth, especially in our oncology business. Customer interest and adoption of NeXT have been excellent, and our pipeline of compelling new products is robust. We have the capital needed to invest in our growth initiatives, such as new products like NeXT Personal, enhancing our operational and regulatory capabilities, expanding collaborations to further highlight the utility of our NeXT Platform, and increasing our capacity to support revenue growth. We believe this positions us strongly for near and long-term growth. With that, I will now hand it over to Aaron for our financial results.

Aaron Tachibana, CFO

Thank you, John, and good afternoon, everyone. We had another great quarter and set a new record revenue level once again, thanks to our focus and strong execution. During my prepared remarks, I will provide details about our financial results for the first quarter of 2021, along with our guidance for the second quarter and the full year. Total revenues for Q1 2021 were $20.9 million, up 3% from $20.2 million for the prior quarter and up 9% from $19.2 million for the same period last year. This $20.9 million represents a new record high for quarterly revenues, driven primarily by an increase in genomic testing services provided to biopharma customers. Excluding the VA MVP, biopharma and all other customers accounted for revenues of $7.7 million in the first quarter, reflecting a 74% increase over the same period last year. This marks our second consecutive quarter with a year-over-year increase of more than 70%, underscoring key points. First, the customer orders we have secured over the past year and a half are converting into revenue. In Q1, revenues from our NeXT Platform exceeded $4 million, representing the highest quarterly level achieved thus far. Second, new order amounts continue to contribute to each quarter's revenue reported, providing confidence that our biopharma revenue will continue to grow in the future. Our current biopharma revenue predominantly stems from tissue samples. As we ramp up our liquid biopsy offerings, this should accelerate growth due to the multiple testing points or, in other words, the number of tests per patient. For Q1, the VA MVP revenue of $13.2 million was 5% higher than the previous quarter but 10% lower compared to $14.8 million for the same period last year. As previously mentioned, we do not have specific testing turnaround times for the VA MVP, allowing us to modulate volume to complement the biopharma sample testing volume, which can vary occasionally. The VA MVP unfulfilled orders were $30.3 million at the end of Q1, and based on current estimates, we expect these unfulfilled orders to convert to revenue over approximately the next two quarters. The gross margin for Q1 was 35.6%, compared to 30.1% from the prior quarter and 21.1% for the same period last year. The sequential increase of 5.5 percentage points mainly resulted from efficiencies in sample processing and a slight reduction in expenses. The year-over-year increase of 14.5 percentage points stemmed from customer mix and operating leverage from the 74% increase in biopharma volume, combined with lab efficiency improvements. We typically do not provide gross margin details by customer type; however, it's worth noting that the VA MVP's gross margins remain solid due to a high volume and a single service offering that has been automated and operates with an efficient sample testing process. Over the next couple of years, there could be some variability in gross margins due to investments in new capabilities, expansion, particularly in China, and more. In the long term, we expect to see our gross margins increase as we achieve scale. Operating expenses in Q1 came in at $19.9 million compared with $13.7 million for the same period last year. R&D expense was $9.5 million in Q1, compared with $6.4 million for the same period last year, and SG&A expense was $10.4 million in Q1, compared with $7.3 million last year. The increase in R&D expenses is primarily due to new product development, while the increase in SG&A is due to commercial expansion, public company costs, and infrastructure enhancements. The net loss for Q1 was $12.4 million compared to a net loss of $9.1 million for the same period last year. The net loss per share for Q1 was $0.29, with the weighted average basic and diluted share count at 42.3 million, compared to a net loss per share of $0.29 with a weighted average share count of 31.3 million in the same quarter last year. Now, turning to the balance sheet, we exited Q1 with a strong position, holding cash and short-term investments of $353.4 million. In Q1, we utilized $11.7 million of cash from operations due to our net loss and working capital needs. Capital equipment expenditures were minimal at $0.4 million. We expect our cash usage to increase from the mid-$40 million range in 2020 to a level between $80 million and $90 million in 2021 as we invest in various growth initiatives ahead of us. Now, turning to guidance. Our business has been resilient throughout the pandemic, with robust customer orders for the NeXT Platform over the past year and a half. With that in mind, for Q2 2021, we forecast total company revenues to be approximately $21.3 million, and we expect biopharma revenues, excluding the VA MVP, to fall in the range of $7.3 million to $7.7 million, reflecting a year-over-year growth rate of 54% to 62%. The net loss is expected to be in the range of $16 million to $17 million, with a weighted average basic and diluted share count of approximately 43 million. For the full year 2021, we anticipate total company revenues to be around $85 million, with biopharma revenues, excluding the VA MVP, expected to be in the range of $30 million to $32 million, representing an annual growth rate of 33% to 42%. The net loss for the year is estimated to be between $70 million and $75 million due to increased expenses, with a weighted average basic and diluted share count of approximately 44 million. We plan to offer updates on this information during our next earnings call. I will now turn the call back over to the operator to begin the Q&A session.

Operator, Operator

Your first question comes from the line of Tejas Savant from Morgan Stanley. Your line is open.

Unidentified Analyst, Analyst

Hello, this is Yuko on for Tejas. Thank you for taking our questions.

John West, CEO

Hi.

Unidentified Analyst, Analyst

Hello, how are you thinking about positioning the MRD offering in light of multiple players entering the market? And as a follow-up, what are your views on tumor-informed versus tumor-agnostic approach for MRD?

John West, CEO

I'd be happy to answer that. Personalis expects to have the highest performance MRD offering available on the market. We anticipate being able to monitor over a thousand genetic variants, which gives us significantly more sensitivity. Most other products on the market look at a much smaller number of genetic variants, which limits their sensitivity. We expect to be highly sensitive, and because of this rich content, we aim to provide the most informative insights regarding quantitative aspects of tumor detection and how the tumor changes over time. Regarding tumor-informed versus tumor-agnostic approaches, a tumor-agnostic approach does not leverage information about the location of genetic variants. When sequencing DNA from plasma, usually you might find one mutation for every million bases across the genome in a tumor, meaning 99.9% of the sequence reads don’t provide useful information. This makes it an inefficient approach and not very sensitive. We believe adopting a tumor-informed approach is crucial to achieving the sensitivity we aim for, reflecting the performance we’ve observed from customer-provided samples. More on this will be shared as the product comes out, but the tumor-informed approach is clearly superior.

Unidentified Analyst, Analyst

Got it. That was very helpful color. Thank you. And then how are you thinking about entering the clinical market down the road?

John West, CEO

This is an important next step for Personalis. We anticipate moving into this market over the next few years. Our initial focus has been on pharmaceutical companies, often with advanced customers where reimbursement isn't an issue, allowing us to maintain a strong financial performance. We believe existing diagnostics aren’t sufficiently informative, and patients would benefit from having richer, more sensitive information. Many cancers can go undetected for a year or two, as the existing tests lack the required sensitivity. We’ve analyzed data from current tests and can see the needed sensitivity to detect most cancers much earlier than currently possible, which is what we're developing in our NeXT Personal products. By monitoring over a thousand genetic variants, we believe it will transform the field. Initially, this advanced testing will likely start in high-end cancer medical centers, and we're already working towards obtaining FDA approval for our NeXT Platform.

Unidentified Analyst, Analyst

Thank you.

Operator, Operator

Your next question comes from the line of Doug Schenkel from Cowen. Your line is open.

Doug Schenkel, Analyst

Hey. Good afternoon everybody and thank you for taking my questions. So, I guess on NeXT Personal, I'm just wondering if you could share what we should be looking for in terms of upcoming R&D and commercial stage gates or milestones for that product line?

John West, CEO

Yes, we have reached a point where we can begin testing customer provided samples. Several customers are interested in evaluating the performance of NeXT Personal, given its differentiated capabilities. We plan to formally launch the product in 2021. By that time, we should have a substantial number of samples from customers and collaborators and expect to be operational. We anticipate synergy between NeXT Personal and NeXT Liquid Biopsy, particularly if a patient has undergone surgical resection of their tumor. We can apply our NeXT Platform on that tissue to identify genetic variants, and then use NeXT Personal to monitor for tumor recurrence. This comprehensive approach will enhance the detection of new mutations that may arise during treatment.

Doug Schenkel, Analyst

Super helpful, John. And kind of using that segue from Personal to liquid, it's nice to hear that you delivered your first customer order for NeXT Liquid Biopsy. What do you expect the ramp to look like from here? And then are the initial use cases likely on retrospective samples, or do you think that there's going to be early use in prospective samples as well?

John West, CEO

That's a good question. We expect a lot of pilot activities initially, especially in 2021. We're continuing to process samples for customers, many of whom are keen to receive results quickly. While some samples will be retrospective, a considerable amount of our NeXT Liquid Biopsy business in the early period will likely involve retrospective samples from pharmaceutical customers.

Doug Schenkel, Analyst

Okay. One last one. In HCR, there was a poster from Personalis specific to NeXT Liquid Biopsy and pan-cancer shedding patterns for ctDNA for cancers with different genetic backgrounds and tissue of origin.

John West, CEO

One of our collaborators has been working with a high-end medical center, and we were able to show using NeXT Liquid Biopsy that they identified significant variants impacting tumor progression. These variants are often not covered in smaller conventional panels. With our whole exome, we have all the genes included. This emphasizes the importance of having comprehensive testing capabilities to ensure we identify evolving tumor attributes effectively.

Doug Schenkel, Analyst

Thanks a lot, John.

John West, CEO

Good. Okay. Thank you.

Operator, Operator

Your next question comes from the line of Patrick Donnelly from Citi. Your line is open.

Unidentified Analyst, Analyst

Great. Thanks. This is Jesse on for Patrick. Thanks for taking the question. Can you remind us of the timing for the new China lab and what revenues you factored in for the guidance in 2021?

John West, CEO

Our China lab is set for development and buildout throughout 2021. We are nearing readiness to begin testing, having completed the necessary preparations and hired initial staff. While there won't be substantial revenue from China in this year's guidance, we view this as a buildout year with revenue opportunities beginning in 2022 and beyond.

Aaron Tachibana, CFO

2021 is dedicated to establishing the lab, although we’ll start processing samples this year on a pilot basis. Significant revenue opportunities are anticipated in 2022 and beyond. Opening this lab will vastly increase available market access not just within China, but for our existing global pharmaceutical partners.

John West, CEO

Yes, that’s right. We expect this will be an incredible opportunity for conducting clinical trials in China, while we can process samples from other countries alongside those from China, further expanding our service capabilities.

Unidentified Analyst, Analyst

Okay. Great. That's really helpful. Can you provide an update on the POPSEQ pipeline outside of the VA MVP? I think you mentioned expecting to start new relationships in 2022.

Aaron Tachibana, CFO

We’ve onboarded a lead for business development, who is well-versed in population sequencing projects globally. Interest in our services has been phenomenal as countries increasingly seek clinically-oriented population genomics solutions. We expect to announce the first additional orders in 2022, with revenues following shortly thereafter. While government programs can have lengthy decision processes, we remain positive about our prospects.

Unidentified Analyst, Analyst

Okay. That's great. Thank you.

Operator, Operator

Your next question comes from the line of Mark Massaro from BTIG. Your line is open.

Vidyun Bais, Analyst

Hey guys. This is Vidyun for Mark. If you could provide an update on how the entire partnership is progressing, what milestones we should look for there? And also, does biopharma still appear to be a larger portion of your revenue mix going forward?

John West, CEO

The partnership with Natera is thriving, and they’re progressing rapidly. This program's outcome will significantly impact their revenue but cannot disclose specifics about their financials. However, it's a clinical program showing great promise. As for biopharma, we witness a merger of our oncology and population sequencing businesses, increasing overlap. Both segments will see growth, but oncology may ultimately outpace population sequencing. Biopharma currently represents a significant portion of our revenue mix and is likely to continue to do so.

Vidyun Bais, Analyst

Okay. Thank you.

Unidentified Analyst, Analyst

Are you able to provide an estimate on the likelihood of renewing the VA contracts and visibility for getting a task order? Can you also address some competitive factors at play?

John West, CEO

We are in talks with the VA regarding our existing contract, which has been ongoing for many years. We expect an additional task order to be issued between now and the end of August. Our strong relationship with the VA, combined with our track record of delivering high-quality results, positions us well for contract renewal. Notably, we've been the exclusive provider for the VA MVP's whole genome sequencing initiative since 2012, which has led to a successful partnership over time and numerous contract awards.

Vidyun Bais, Analyst

Thanks for taking the question.

John West, CEO

Thank you.

Operator, Operator

Your next question comes from the line of Mike Matson from Needham & Company. Your line is open.

Mike Matson, Analyst

Hi, good afternoon. Thanks for taking my questions. I wanted to start with gross margin. What updates can you provide about improving gross margins aside from volume increases?

Aaron Tachibana, CFO

Gross margins are significantly influenced by volume. Our recent quarter achieved remarkable growth in biopharma revenues, which positively impacted our margins. Importantly, as we automate our biopharma testing process, we will reduce labor costs per sample processed, which is key in improving our gross margins. Achieving scale will position us to reach margins comparable to industry peers.

Mike Matson, Analyst

I'd like to revisit the Natera partnership. Are you still planning to provide sequencing services for other companies? Will that coexist with your own products?

John West, CEO

We see value in a large market, and our collaborations with others will not hinder our product development. Other companies employ diverse strategies, and while we provide support for them, we remain focused on becoming a leading company within this space. In the long term, our revenue growth will primarily derive from our own products, but the partnerships we foster will benefit us along the way.

Mike Matson, Analyst

For population sequencing, could you discuss the types of groups showing interest and whether it's mostly governmental?

John West, CEO

The majority of projects we are engaging with are from countries outside the United States. We are seeing strong interest across various governmental and multi-sectoral programs, particularly in countries eager to implement population genomics initiatives that include clinical components. Our collaborations with pharmaceutical companies indicate potential revenue opportunities as clinical trials initiate in their respective regions.

Mike Matson, Analyst

Thank you.

Operator, Operator

Your next question comes from Swayampakula from H.C. Wainwright. Your line is open.

Swayampakula Ramakanth, Analyst

Thank you. This is RK from H.C. Wainwright. Good afternoon, John and Aaron.

John West, CEO

How are you, RK?

Swayampakula Ramakanth, Analyst

Doing good. I just want to understand more about the MapKure relationship, where you're supporting their clinical trials and diagnostics. How will this partnership help invite other players to work with you?

John West, CEO

Companion diagnostic development is crucial, and we aim to shift towards more sophisticated biomarkers. MapKure is using our platform for their clinical trial, and such partnerships can foster interest from other pharma players looking for advanced diagnostics. These partnerships will likely enhance our financial stability if their drug progresses through trials. Along with a steadily growing pipeline, we are ambitious about securing FDA approval for our NeXT Platform.

Swayampakula Ramakanth, Analyst

Thank you, John. I don't have any additional questions at this point, but I'll talk to you soon.

John West, CEO

Okay. Great to hear from you, RK.

Operator, Operator

There are no further questions on the phone line at this time. This concludes today's conference call. Thank you for participating. You may now disconnect. Thank you, all.

John West, CEO

Thanks. Bye, bye.