Q3 2022 Pixelworks Inc Earnings Call
Yeah.
The conference will begin shortly to raise your hand during Q&A you can dial star one one.
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Yeah.
Good day, ladies and gentlemen, and welcome to pixel works Inc's third quarter 2022 earnings Conference call.
I will be your operator for today's call at this time, all participants are in a listen only mode.
Following management's prepared remarks instructions will be given for the question and answer session. This conference call is being recorded for replay purposes.
I'd now like to turn the call over to Brett Perry of Shelton Group Investor Relations.
Thank you Andrew and good afternoon, and thank you for joining us for today's call with me on the call are <unk>, President and CEO tied to bonus and Chief Financial Officer Haley upon.
The purpose of today's call is to supplement the information provided in <unk> press release issued earlier today announcing the company's financial results for the third quarter of 2022 before.
Before we begin I would like to remind you that various remarks that we make on this call, including those about projected future financial results economic and market trends and competitive position constitute forward looking statements. These forward looking statements and all other statements made on this call that are not historical facts are subject to a number of risk.
<unk> and uncertainties that may cause actual results to differ materially.
All forward looking statements are based on the company's beliefs as of today Monday November seven 2022, the company undertakes no obligation to update any such statements to reflect events or circumstances occurring after today. Please.
Please refer to today's press release, our annual report on Form 10-K for the year ended December 31, 2021, and subsequent SEC filings for a description of factors that could cause forward looking statements to differ materially from actual results.
Additionally, the company's press release and management statements. During this conference call will include discussions of certain measures and financial information in GAAP and non-GAAP terms, including gross margin operating expenses net loss and net loss per share non-GAAP measures exclude amortization of acquired intangible assets and stock based compensation expense the company uses.
These non-GAAP measures internally to assess operating performance. We believe these non-GAAP measures provide a meaningful perspective on core operating results and underlying cash flow dynamics, we caution investors to consider these measures in addition to and not as a substitute for nor superior to the company's consolidated financial results as presented in accordance with GAAP.
Also note throughout the company's press release and management statements. During this conference call. We refer to net loss attributable to <unk>, Inc. Is simply net loss for additional details and reconciliations of GAAP to non-GAAP net loss and GAAP net loss to adjusted EBITDA. Please refer to the company's press release issued earlier today.
With that it's my pleasure to turn the call over to <unk> CEO Todd. Please go ahead.
Thanks, Brett.
And welcome to everyone joining us on today's call.
Starting with our reported results we delivered another solid quarter with revenue at the midpoint of guidance and growing 16% year over year. During what continues to be a very challenging environment for the broader semiconductor industry.
The pixel works team has continued to execute despite the various macro challenges and this quarter marks the sixth consecutive quarter of double digit year over year growth in both our mobile and projected businesses.
Total revenue year to date is up 38% over the first nine months of 2021, and we expect to close out 2022 with a full year growth in excess of 25%.
Despite inflationary cost pressure throughout the year and our mobile growth contributing to an increasing portion of our total business. We've maintained healthy gross margins that were at 50% in the third quarter.
Additionally, both opex and EPS for the quarter were better than the midpoint of guidance, reflecting our careful cost management and attention to improving bottom line results over time.
In addition to our solid operating performance during the quarter, we closed a strategic investment or Shanghai subsidiary at nearly two times the valuation of the previous investment round.
Our ability to execute this transaction in the current environment.
Delighted the recognition and growing opportunity for our visual processing technology across Asia.
It also enabled us to further strengthen our balance sheet in support of driving momentum in our mobile business and our growth initiatives for the true cut motion platform.
Turning to updates on our primary end markets.
As expected mobile business was down sequentially from a record quarter revenue, we posted in the second quarter.
Primarily reflecting the start of a broadly acknowledged inventory correction in smartphones and weaker consumer demand in China.
With that said, we maintained solid growth year over year with mobile revenue, increasing more than 25%, which represented the seventh consecutive quarter of year over year growth and year to date, our mobile revenue was up 44% compared to the first nine months of 2021.
Although the pace of new smartphone launches by mobile Oems has slowed with various planned models that you are being pushed out or canceled as the industry focuses on working down excess component inventories. We have maintained a high level of engagement activity and continue to secure new design wins.
As a result of the current market dynamics, we have experienced certain customer programs that were originally targeted for either our latest X seven processor instead incorporate our X five plus solution as part of the efforts to either reduce existing component inventory and or minimize the total bom cost of devices.
While this defers the opportunity to penetrate the market with our <unk>.
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Global leaders in October vivo launched the IQ seven smartphone incorporating an upgraded <unk> X five visual processor.
With the goal of delivering a more captivating gaming and video experience.
Built on media text, Immensity, 9000, plus flagship <unk> mobile platform the.
The IQ near seven Leverages, our patented mimic technology with high efficiency interrelation algorithm to boost low frame rate gaming content to high frame rates of up to 120 frames per second.
In addition to our motion engine now being adapted for optimal performance on 'twenty one popular mobile games. We have worked closely with IQ to incorporate a unique set of built in visual effects and enhancement.
These modes or gaining filters give the end user full autonomy to choose between preset visual styles or create their own custom filter by adjusting individual visible quality parameters.
Earlier in the quarter. We also added sharp as a first time customer in mobile with Sharp's launch of the Aqua since seven plus smartphones.
Primarily targeted for consumers in Japan this device.
Based on Qualcomm Snapdragon 695, five mobile platform features an impressive six four inch OLED.
OLED display with a 10 color depth and 1300 Nits peak brightness.
As a result of our collaboration and the incorporation of our X five plus advanced visual processing solutions.
<unk> seven plus enables five times video frame insertion or up to 120 Hertz and also supports variable frustrate refresh rate.
Stepping back year to date, our mobile visual processor solutions have been incorporated in smartphones launched by three of the four tier one Oems and their respective affiliate brands in China, including vivo haiku, Opal real meaning one plus and on.
More broadly our technology has enabled devices launched this year.
<unk> sure.
Effectively all of these models.
But these OEM customers were either directly targeted.
Net or marketed as supporting advanced visual quality for higher frame rate mobile game at low power.
Together with our efforts to spearhead and engaged ecosystem for mobile gaming through ongoing collaborations with multiple leading game engine platforms and design Studios Pixar works has distinguished itself within China as a technology leader in the area of mobile visual processing.
This recognition, creating expanded opportunities for our technology.
Both in the form of deeper strategic engagements with AP platform vendors and.
An increasing inbound interest from IC design firms to license and incorporate certain textbooks visual processing IP into their next generation solutions.
We are currently in late stage discussions on multiple prospective license engagements.
One point I'd like to emphasize about any prospective deals involving IP licensing is that they are carefully evaluated and subject to key engagement criteria.
Most important we will not pursue a licensing arrangement, which arose existing market potential that we could otherwise address it directly.
In other words, we believe these current perspective by Vcs are incremental opportunities to further monetize our technology.
Turning to an update on our true cut motion platform.
We are excited to see the successful re release of lifestyle and entertainment Avatar. This September the <unk>.
First globally available title.
Remastered with true cut motion.
Our tools were used on every frame of this iconic movement, allowing cinemas to play at <unk> resolution and high dynamic range with the motion look tuned shot by shot to achieve exactly what the filmmaker intended.
This release was seen in 47 markets worldwide, achieving a gross block box office sales of over $76 million.
<unk> its position as the highest grossing movie of all time.
We can now confidently say that we have a global true cut motion cinema ecosystem.
Ecosystem in place.
As part of our previously announced multi license agreement with light Storm Entertainment today, we are actively working to replicate the same level of success with the re release of Titanic, which.
Which is slated to hit theaters in early February .
With growing momentum on the content side of the ecosystem. Our team's focus is now on securing a global entertainment ecosystem.
Shifting to the projector business.
Revenue grew single digits sequentially and increased 10% year over year, reflecting the highest quarterly revenue in more than two years.
Although customers have more recently indicated some improvement in their ability to source other key projected components, such as timing controllers and Pam.
The extremely tight supply environment and long lead times for components earlier in the year tampered projector Oems for meeting total end demand.
So far this demand is still present and our projected customers believe they will no longer be supply constrained by early next year.
Also notable is in the projector business our co development project with our largest projected customer remains on track and we expect to complete the development work on this next generation Soc by year end.
Upon completing the development work, we are entitled to receive a contract milestone payments, which will be recognized as a credit to R&D and meaningful meaningfully reduced our reported opex for the fourth quarter.
As a reminder, we anticipate this new SSE to be in production in late 2023, and continue to ramp and supported an increasing number of our lead customers projector models.
Finally, I want to highlight our recent strategic actions, we took in our video delivery business to end of life a series of legacy ICF.
As a reminder, we acquired this business as part of the <unk> systems in the second half of 2017.
It has been comprised of several transcoding Ics that we primarily sold into consumer applications in Japan as well as OTT devices here in the U S.
Another area of these trans coders are used as in video delivery infrastructure.
Specific applications often require unique packaging and are generally much lower volume.
Making it increasingly difficult to source and supply efficiently overtime.
As a result, we've implemented an email or end of life on certain portion of these train coating transcoding Ics, which will result in a onetime increase in video delivery revenue in the fourth quarter.
In summary, we are executing well in the face of many macro related headwinds and continue to pursue strategic actions to mitigate the near term impacts of the current environment. We.
<unk> kept our inventory in check and at healthy levels.
We are being prudent on costs and spending including limiting any incremental new head count and we've added cash to the balance sheet at a very attractive valuation with minimal dilutive impact to shareholders.
During the quarter. We also completed the planned conversion to a joint stock Corporation as part of our preparation for our pixel works Shanghai subsidiary for a local listing on the star market in China.
This structural change brings us one step closer to pixel works Shanghai, beginning the Crs two dream process and ultimately submitting its formal application for the mid tier.
While we remain cautious about the near term macro environment and consumer demand. We are in a strong financial position to fully execute on our growth initiatives and fully extend picks which technology leadership into our targeted end markets.
With that I'll hand, the call to Hayley to review the financials and provide our guidance for the fourth quarter.
Hany.
Todd.
Revenue for the third quarter of 2022 was $17 6 million down 8% sequentially from $19 1 million in the second quarter and representing an increase of 16% from $15 2 million in the third quarter of 2021.
Our top line results for the quarter were driven by a combination of continued strong year over year growth and.
Same customer demand in our projector business with.
With projector revenue once again, reaching the highest quarterly level since the onset of the pandemic.
The breakdown of revenue in the third quarter was as follows.
Revenue from mobile increased more than 25% year over year to approximately $6 million, which represented just over 34% of total revenue in the third quarter.
Similar to recent quarters sales of our integrated circuits were the largest contributor to mobile revenue this quarter.
Revenue from projector was approximately $9 9 million, increasing 5% sequentially and 10% year over year again, reflecting sustained customer demand.
Video delivery revenue was approximately $1 6 million in the third quarter.
non-GAAP gross profit margin was 49, 8% in the third quarter of 2022.
Compared to 49, 3% in the second quarter of 2022 and.
And compared to 53, 1% in the third quarter of 2021.
non-GAAP operating expenses were $12 2 million in the third quarter compared to $12 9 million last quarter and $10 1 million in the third quarter of 2021.
On a non-GAAP basis third quarter 2022, net loss was $3 2 million or a loss of six cents per share.
Compared to a net loss of $3 3 million or a loss of <unk> <unk> per share in the prior quarter.
And a net loss of $2 2 million or a loss of <unk> <unk> per share in the third quarter of 2021.
Adjusted EBITDA for the third quarter of 2022 was a negative $2 1 million compared to a negative $2 4 million last quarter and a negative $1 6 million in the third quarter of 2021.
Turning to the balance sheet.
We ended the quarter with cash and cash equivalents of $57 6 million.
The sequential increase primarily requested $10 7 million in net proceeds from closing the transaction to transfer approximately two 7% of pixel works equity interest in our Shanghai subsidiary to new private equity investors.
This increase was partially offset by cash used in operating activities.
Shifting to our current expectation and guidance for the fourth quarter of 2022.
We anticipate fourth quarter total revenue to be in a range of between $16 million and $18 million.
The midpoint of this range total revenue for the full year 2022 would represent annual growth of approximately 27, 5% over 2021.
non-GAAP gross profit margin in the fourth quarter is expected to be between 56% and 58%.
The anticipated sequential increase reflects a more favorable product mix comprised of an expected increase in licensing revenue and an increase in revenue related to the end of life of certain legacy chips sold into the video delivery market.
In terms of operating expenses in the fourth quarter we.
We currently expect to achieve our planned milestones related to our co development agreement.
As with previous treatment.
The milestone payment will be recognized as the credits R&D, reducing our anticipated reported operating expenses in the fourth quarter.
Taking this credit into account, we expect operating expenses to range between $10 million and 11 million on a non-GAAP basis.
Lastly, we expect fourth quarter non-GAAP EPS to range between a loss.
<unk> per share.
Income per share.
That completes our prepared remarks, and we look forward to taking your questions.
Operator. Please proceed with the Q&A session. Thank you.
Thank you Lee.
Ladies and gentlemen, if you have a question at this time. Please press star one one on your telephone once again, if you have a question at this time. Please press star one one.
Please.
Okay.
Our first question comes from the line of <unk> Desilva with Roth capital.
Hi, Tom Hi, Haley.
I was hoping you could talk about.
Video delivery, how much revenue and I think you'll see.
Because last time buys in the fourth quarter.
I can let haley answer that but I don't were not going to breakout exactly how much it is but she'll give you.
I think.
Yes, I think for video delivery revenue in the fourth quarter, you can expect it to increase.
Over 100%.
Okay.
Okay.
Got it and then.
Congrats on the Shanghai <unk>.
Valuation certainly.
So while the how much what percent of that are you willing to potentially sell Todd pre IPO that could be a source of funding do you guys as well I understand.
Well I mean listen so.
This particular financing.
Was a unique financing I mean, one thing that we did with this financing is we actually sold.
Our equity fix works inks ownership equity to a new round of investors versus a dilutive event to all the investors in fixed sort of Shanghai.
And so the net cash from net financing actually all came back to the U S to pixel works Inc.
And so.
That was nice because we want to make sure not only do we have great balance sheet, but we wanted to have a great balance sheet for both.
Here in the U S, but also for our China subsidiary.
And making sure that both are properly financed for their strategic goals.
And so I would say.
We were very focused on that event and that of it had to be completed before we completed.
The conversion to the Georgia Dock Corp.
Got it and so there was a lot in that financing.
We are now post conversion.
<unk> IPO.
It doesn't prevent you from doing financing, there's some limitations about doing a financing in this particular window when per guidance.
I haven't really thought about how much.
At the end.
How much we would still like to own after we finance the public offering.
And we will still control.
A large percentage of the subsidiary those findings.
Okay. That's helpful. And then looking ahead to the gross margin guidance for <unk>.
What areas of the licensing benefit coming from is that from mobile is that true.
We anticipate.
We're not going to break that out at this time.
As you know.
We've had.
Software licensing in the past.
We've had some true cut licensing in the past and on the earnings call I talked about IP licensing from our mobile group, we now have inbound interest for IC.
Licensee.
And all of those would still be rolled up underneath our mobile revenue so.
We're not going to we may break out.
After the quarter is over.
How much of mobile revenue in total.
Licensing revenue, but I don't think we're going to break it out on an individual basis at this point.
Okay. That's helpful color. So the last question on the.
I guess, just more broader trend of new model designs being pushed out X seven designs being swapped in frac five to work down inventory I'm curious on that.
Well it might be the margin impact of having to kind of put X five through versus having got the uplift from maybe newer <unk> seven models any thoughts there would be helpful. Thanks.
I would I would say that where we were trending with that we still had we've already launched seven phone.
And with real needs and we have several new phones that have designed in the <unk> seven there'll be launched in early 2023.
We're in the process.
Yes.
I look at where we are with pricing on those and where we are with X five and theres not a big difference to.
Today and in the gross margin profile.
Okay, great. Thanks, guys.
Thank you.
Yeah.
And our next question comes from the line of Sam Peterman with Craig Hallum.
Hi, Todd Thanks for taking my question.
I wanted to ask first on mobile I'm, just kind of curious.
A lot of companies in the industry talking about.
So maybe fourth quarter is kind of.
Where mobile sales and trying to kind of a bottom and maybe there could be a little bit of growth in the first and second quarter next year. So I guess I'm curious just broadly how you are seeing kind of inventory trends in China with phones.
Specifically to your mobile business, if I do the numbers it looks like.
It seems like Youre guiding to.
Mobile being down quarter over quarter in December .
Talk through where you are where do you see that segment.
Fourth quarter that'd be great too.
Okay. So first of all I think I got it.
Question. The first part of the question Sam was specific to the mobile market the end market.
You are seeing.
I think.
You saw.
A slightly better sell.
L three in.
In Q3 versus Q2, but in Q2, Shanghai was locked down.
Alright.
It's quite a bit this year.
Yes.
Sure.
We expect that Q4 will be better than Q3.
And then as you go into Q1.
I think it's somewhat depends on the position.
Of.
The diner damage Covid policy.
And as they start to come out of it I think you could see.
Consumer come back.
<unk>.
We still see.
Theres certainly finished good inventory.
With the mobile Oems, there, but the bigger issue that they're having.
It depends on the components they they win in the environment, where we were highly constrained to trying to buffer inventory.
Order a lot of component and so depending on the components they have quite a bit of inventory that they have to pull through and they have to push it into new model. So the bigger impact is.
If the OEM has made a decision.
That they don't want to write off any inventory.
Then they will have to try to use the existing component inventory whether they.
Aps image signal processors displays so on and so forth.
And so will it means that they're going to focus on putting models out in the market that probably don't have a lot of differentiation in previous months.
In our particular case.
We are distributor really doesn't have much inventory most of it has already been sold to the Oems. One particular OEM has quite a bit of X five inventory that's why the deciding to put many more models with X five than they originally anticipated to burn off that inventory.
But we have other customers that have no inventory and are migrating to X seven.
And our next generation solutions.
Yes.
So for us I'm not really worried about it.
And obsolete inventory issue I'm worried about when the demand comes back and it comes back strong enough that the.
The Oems have FERC through.
All their various inventory decisions.
And they can be more.
Agile in how they market their new phones.
Oems will be there early I think they may take market share some Oems are going to take longer to get through it but I don't believe it will be through it by the end of Q4.
I believe the end of Q1 is here.
Could linger into Q2 next year.
Okay. That's helpful color thanks for that Tom.
I guess also on mobile.
Probably.
Kevin.
Maybe some of those designs are being pushed out but can you talk about.
I guess, just what youre seeing from Oems.
Terms of the enthusiasm for.
Differentiating problems based on gaming performance of that.
Is that focus shifting at all with kind of the macro being weak are you still thinking just a strong interest and engagement with mobile gaming being a key factor.
Well I think.
For the amount. So these Oems that we do business with <unk> business.
They don't do much business here.
New business growth.
Third largest position for all four of them is in China.
Andre is probably the most concentrated.
In China Xiaomi.
As the most business outside of China, but they all have a large chunk of business in China.
China Mobile gaming is still a theory.
Uh huh.
Area.
<unk>.
Especially the premium searcher.
So I think I think there is still a big focus there.
I think as we have made.
We've done very well with the ecosystem engagement.
The content providers and mobile gaming content providers, leading mobile game companies. They want to put out more immersive versions of their games for the mobile environment not just the desktop.
And they see the same issues the system level issues.
Use the battery issues and the framework issues.
And so they see us as a great opportunity.
For them to reach their their goals on how to bring a more.
More immersive AAA gaming experience to them. So the more content, providing ecosystem, we can create and the more and more games that get announced supporting our platform.
The more we will get from Oems.
Sure.
Gotcha, Thanks for that Tom.
If I can ask one more just quickly on truecar.
Have a nice comment on the press release about it.
But I'm curious just with avatar, having been released.
Youre going to see some of the reviews of that can you talk about how I.
I guess engagement in the industry has has been since that whether that's with other content creators are with.
With streaming services or anything like that any color there would be great.
We have been.
So twofold.
Like there's two things going on with the team we have a small team in Chicago.
And.
They are very good.
They're busy twofold one they.
Our focused.
We tried to enable third parties with this announcement with histologic and we've talked to others to leverage the capability of bringing truth that motion grading to the content creators, but not just have to do it ourselves, but the first couple of engagements. We've done people wanted to work with us.
So all the work on Avatar was done.
All the work that's going on with Titanic and the other content that we're working on right now is with business.
So we haven't.
Very good team.
Not that large, but it's extremely busy doing this content creation and making a bit.
And then we have another team.
Without trying to do demand creation and Dominion cement demand creation is twofold. One is we are engaged with there.
Has been a lot of studio engagement.
Since the release of that data release.
<unk> identified.
And then secondly, we're very focused on.
Getting the streaming and device ecosystem up and running.
Well effectively what we've done is we've created movies to look really good at high frame rate.
<unk>.
Steve.
We have the ability to make that same content look really good.
For the home entertainment ecosystem screened for home entertainment ecosystem.
We have not license the ability for any of this content to be.
True cut motion stream.
We are working very hard.
Okay. Thanks, Todd Thats it for me.
Great. Thanks, Sam.
Q.
And our next question comes from the line of Nicholas Doyle with Needham <unk> Company.
Okay.
Hi, guys. This is Mike Doyle on for Rajeev Yale Thanks for taking my question.
You just gave really good color on that.
My earlier question.
Hence the markets for that.
So my question would be if you could just talk a little bit more about the projector business.
A couple of moving pieces into next year.
Customers won't be supply constrained and then we have kind of the offset with the macro in <unk>.
Environment dragging production, but then we have the new ISO see coming maybe late end of the year. Just if you could give more color on the direction of that business I think last quarter you mentioned.
That <unk> would be a flattening out or or something along those lines. So any more detail there would be great.
Yes, Nick.
Thanks for the question I appreciate it.
So on projector, we normally have a seasonality where.
Q3 is usually been our highest in the past over the last five years in Q1 as the lowest mainly.
Mainly because most of our Japanese customers runoff a fiscal year that ends in March and they try to lean their inventories whatever they may be going into the March quarter.
Sort of Buck that.
That seasonality this year going into next year, you might see it.
It's somewhat being offset by.
Sure.
They have this built up demand.
For systems that they couldnt deliberate.
If I looked at it combined it's about if you look at how many devices, we ship to all our Oems for the quarter.
These guys have built up demand as they can.
The address because of past shortages.
Just a quarter's worth of ships.
Alright, thats about the Sip area.
Where there are shortages costs than in the past.
Not by US we kept in front of us here.
By other component vendors predominantly T con.
And panel vendors, we see that freeing up now the question is and it's a good question with the macro environment softening.
Will that demand.
David.
Until it gets fulfilled or will in the road as they come out of.
The supply challenges.
We don't have an indicator of it yet right.
So far the demand has stayed strong.
Even even with.
Zero Covid in China, They have had a reasonable bounce back for the end market for projector.
And in China.
Both the U S was very strong will subside now with the economy going down Europe was starting to slide.
Mainly because of what's going on.
So that will sort of dictate how projected will look in the front half.
It doesn't look doom and gloom it could be good but I think it's too early to tell the truth.
And then the new the new SLC.
We'll be sampling the customer in the front half of the year, but it takes them a good they've got identified programs that they want to ramp quickly high volume quickly.
But even if they move quickly it will take at least six months after.
We have accrued silica in their hands to start with and those models. So the sooner you start to see us ramp that volume with the.
From the new assets.
Probably Q4, maybe a little bit.
But most likely in Q4 of 2023.
Okay that makes sense.
And then just to nitpick, just felt a little bit I guess, the gross margins they were up quarter over current air Bud.
Maybe I guess the non-GAAP gross margins were just yet.
What an 80 basis points below I mean is that is that all mix.
It's mixed.
The Q2 and Q3, what we had was.
We had strong mobile business on a comparative basis.
And in.
In projector, we pretty much pass through all price increases that the industry has seen this.
The supply chain has seen price increases from Fabs from assembly from test units right.
In our projector and video delivery businesses, we passed on them.
In the mobile business we passed.
Most of it.
There was we're trying to get a broader attach rate of mobile we just didn't want to.
Push it to a limit where it hit somebody trying to use it so the margins compress a bit in mobile and so the more mobile business, we do it as it is.
Downward compression.
<unk> gross margins.
Yes.
We believe though that these price increases from the supply chain you will start to stabilize.
As they start to go down or not I think it will depend on the demand.
Definitely.
Simply test facility.
If they can stay full without lowering prices.
If they can't Stifel without warning prices when you starts places.
Okay.
That should help us a bit in the mobile.
But what's really going to help us on an aggregate basis.
Supplement with licenses and all the areas that we've talked about before so software licenses to companies.
Yeah.
Yes.
Thank you.
Thank you.
I'll now hand, the call back over to management for any closing remarks.
No. Thanks to the analysts for some good questions. Thanks, everybody else for attending.
We'll keep you posted on our progress. Thank you for your time.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating and you may now disconnect.
The conference will begin shortly.
Raise your hand during Q&A, you can dial star one one.
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Yes.
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