Ladies and gentlemen, thank you for standing by, and welcome to the 10x Genomics Third Quarter 2020 Earnings Conference Call. . Please be advised today's conference is being recorded. I would now like to hand the conference over to your speaker today, Mr. Eric Jaschke, Director of Investor Relations and Strategic Finance. Thank you. Please go ahead, sir.

Thank you. Earlier today, 10x Genomics released financial results for the third quarter ended September 30, 2020. If you've not received this news release or if you would like to be added to the company's distribution list, please give an e-mail to investors@10xgenomics.com. An archived webcast of this call will be available on the Investor tab of the company's website to 10xgenomics.com for at least 45 days following this call. Before we begin, I'd like to remind you that management will make statements during this call that are forward-looking statements within the meaning of federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated, and you should not place undue reliance on forward-looking statements. Additional information regarding these risks, uncertainties and factors that could cause results to differ appears in the press release 10x Genomics issued today and in the documents and reports filed by 10x Genomics from time to time with the Securities and Exchange Commission. 10x Genomics disclaims any intention or obligation to update or revise any financial projections or forward-looking statements, whether because of new information, future events or otherwise. Joining the call today are Serge Saxonov, our CEO and Co-Founder; and Justin McAnear, our Chief Financial Officer. In addition, Brad Crutchfield, our Chief Commercial Officer, will be available for Q&A. With that, I'll now turn the call over to Serge.

Thanks, Eric. Good afternoon, and thank you for joining our call to review our third quarter 2020 results. On today's call, I will start with a review of our financial performance during the third quarter. Next, I will discuss some strategic and operational highlights, including updates on recent product launches and acquisitions. I will also discuss the opportunities that lie ahead and how we're planning and investing to capture those opportunities. I will then turn the call over to Justin for a more detailed look at our financials, including detail on the trends we are seeing within our customer base. Starting with our third quarter results. Revenues grew to $71.8 million, up 17% year-over-year, and up 67% sequentially. The strong growth this quarter was driven primarily by an improved operating environment as many labs around the world continue to reopen for general research. Demand from instruments remained high during the quarter, and we saw a rebound in utilization of consumables as more customers return to the lab. The increase from the prior quarter was primarily due to the rebound in general research demand. Overall, in the face of a challenging operating environment, we have made incredible progress thus far in 2020. At the beginning of the year, we laid out our key priorities to drive near-term execution, scale the company and invest ambitiously for the future. While this year has turned out much differently than anyone expected, we continue to execute on our strategic goals and have laid the groundwork for an expanded set of long-term opportunities. In addition to strong commercial and operational execution, we achieved a number of important milestones this year, including multiple product launches, the completion of our follow-on offering, the announcement and closing of 2 acquisitions and the opening of our manufacturing facilities in Singapore.…

Thank you, Serge. Total revenue for the 3 months ended September 30, 2020, was $71.8 million compared to $61.2 million for the prior year period, representing a 17% increase year-over-year. Consumables revenue was $60.6 million, which increased 22% over the prior year period. Instrument revenue was $9.7 million, which decreased 7% over the prior year period. Service revenue was $1.6 million, which increased 46% over the prior year period. The increase in consumable revenue this quarter was primarily driven by growth in the instrument installed base, though this was partially offset by decreased demand due to lab closures related to COVID-19. Instrument revenue was primarily impacted by lower instrument placements during the quarter, though partially offset by a slightly higher ASP due to shipments of Chromium Connect. Service revenue increased due to a larger number of instruments coming off of their initial 1-year warranty and on the paid service contracts. North America revenue for the third quarter was $42.4 million, which increased 18% over the prior year period. EMEA revenue for the third quarter was $15.5 million, which increased 28% over the prior year period. APAC revenue for the third quarter was $14 million, which increased 6% over the prior year period. We saw modest improvements in both the academic and biopharma markets throughout the quarter as researchers continue to return to the lab. We ended the second quarter with approximately 60% of our accounts open for general research. And at the end of the third quarter, we estimated that the number of customer labs open in general research increased to approximately 80%, with many operating at reduced capacity. Currently, we estimate that approximately 85% of customer labs are open for general research in varying capacities. Now turning to the rest of the income statement. Gross profit for the third…

Thanks, Justin. Before we wrap up the call, I want to thank everyone at 10x for your continued dedication and incredible efforts this past quarter. Despite numerous obstacles and challenges, you have executed superbly and achieved a remarkable number of key milestones in just a few short months. Looking ahead, we're now in a better-than-ever position to execute on our ambitious mission. We remain committed to building and commercializing technologies needed to accelerate the mastery of biology and advance human health. With that, we will now open it up for questions. Operator?

. Our first question comes from Tycho Peterson with JPMorgan.

I'll start with ReadCoor. Serge, I'm just wondering if you could talk a little bit about optimizing the technology. Throughput is one issue. I think that's been flagged as something that needs to be improved on. So where do you think throughput can go? And then other ways you could leverage the sequencer as well on the back end beyond kind of the fully integrated system? In other words, could it be decoupled and partnered up with Chromium at some point?

So it's too early to talk about specifics of product configuration and specifications. So at this point, we're very much focused on integrating the teams and the technologies across the 3 different sites, ReadCoor, CartaNA and 10x. We certainly very -- we have -- as I've indicated, we are very excited about the potential of the technology and what it can do and feel pretty bullish, especially in the long term of addressing all the -- whatever concerns that people might bring up around this technology. So we will update the market as -- in the future as we proceed through integration and once we kind of have established -- integrated the teams into our product development process. I think it's too early to talk about sort of anything on the back-end sequencing or configurations around Chromium and the rest of them.

Okay. And then I'm wondering if you could just talk to interest for the base business from translational customers post the IHC launch? And how do you think about that kind of market playing out?

So yes, I mean, we are very excited about the market, and certainly, the traction and translational -- the interest in the translational side of the business. We have talked about -- previously about our clinical translational research network. So it's -- a set of customers have come to us, we form to promote the use cases and teach each other use cases with translational framework. The biggest, probably, requirement within that market is FFPE compatibility, and that's certainly something that we're working on and excited by the progress, and that's coming next year like we've said. But overall, in the long run -- right now and kind of as we look to the long run, it looks very promising, both the level of interest now and the level of excitement about the future of the platform.

Okay. And then last one for Justin. If I kind of look at kind of how things have progressed here, you're down 30% or so in the second quarter and then flattish in July and then 17% for the third quarter implies a big September acceleration. So can you maybe just talk to kind of momentum coming out of the quarter? I know you talked about lab accessibility and the percentage of sites that are open. But as we see cases going back up, I guess, what's the risk of being slowing a bit here versus the momentum you saw in September?

So we closed Q3 with about 80% of customers open. And as of right now, we're at about 85%. So there is some positive momentum towards openings. But as of late, we have seen the case counts continue to rise. So there is some uncertainty as to how this will play out over the next few weeks. So I think that there is the potential downside of perhaps the openings reversing and having some closures. But there's also the upside of customers having the normal seasonal year-end budget expenditures or the seasonality increase that we typically see in most years. And so we'll have to see how those two factors play out as we close out the year.

Tycho, this is Brad. Maybe I'll just give you a little bit of color on the U.K. because that's one that has gone into a more austere sort of mode of shutdown. And then I think we're seeing this across Europe in general is the labs are not shutting down. Although there are severe restrictions on social engagements, restaurants, things like that, but the labs and the schools are staying open. And I think there's been a fair amount of work to see that there isn't a lot of spread within the labs, given the fact that PPE is really the normal within these environments.

Our next question comes from Derik De Bruin with Bank of America.

This is Mike Ryskin on for Derik. Appreciate the questions. I'll start with Visium. You provided some interesting color there on reorders comprising the majority of demand in the quarter for the first time. But could you give us a little bit more color on sequential growth from 1Q, 2Q into 3Q? How many customers are ordering now? And also, is Visium sort of helping you penetrate beyond that traditional Chromium installed base? Are you starting to see some additional customers coming in? Or is this still mostly a lot of overlap there?

In terms of -- I will answer the last question first. Definitely see, continuing to see very nice influx of new to 10x customers. In fact, I would say the fraction probably might have grown this past quarter. And these are again kind of going back to Tycho's question, translational kind of oriented researchers I think it's kind of driving a lot of this interest coming to our ecosystem. So that sort of trajectory is still there and is as strong as it was before, if not stronger. And in terms of kind of the usage, the sequential -- yes, I mean the platform is growing, definitely increasing in traction. It's a little -- the last few quarters have been a little bit hard to analyze, again, because of COVID and because this is a new product, but definitely growing and growing very nicely. So yes. Overall, it's good and the trajectory, especially going to next year, it looks really promising. Okay.

And then, Justin, maybe one for you, especially following the secondary offering this quarter over -- almost $800 million on the balance sheet, even after some of the deals you've done even in the quarter. So clearly, a lot of focus in the prepared remarks on investing in the business, but it seems like you're more than well enough capitalized for that. So is there incremental spend beyond what we've been modeling previously? Which particular areas are you focusing on to sort of add to above and beyond? And then could you give a little bit more color about additional platforms or verticals where you could expand inorganically through M&A, following on the investment in, in situ?

Mike, good question. That's -- the investments in R&D in the commercial order is something that we've been emphasizing on almost every call. And I think with each successive call, we have more and more conviction each time on the opportunities that lie ahead of us. And so when COVID first hit, we took a pause, and we assessed the areas that we could invest in. We made sure that we had identified properly all the different cost levers and all the different scenarios that this could play out. But now coming out of COVID, coming out of the follow-on offering, and the two acquisitions, I don't think that we've had more conviction than we do now, that now is the right time to invest for the future. So I think, with each successive call, there's more investments that we plan to make. And so it is probably above and beyond what folks have been thinking about in the past.

And about the capital deployment side on the M&A angle, should we expect the continued cadence of sort of technology platforms?

So on that question, I would say, our philosophy kind of goes back to starting with the goal of pushing out the frontiers of biology and life sciences generally and kind of working backwards from there in terms of what technology needs to get developed. And as part of that, we think about M&A, again, in that context. We don't have a specific target for acquiring some number of companies every year or every quarter. But in the context of kind of the overarching mission of the company, we certainly see M&A as part of our larger strategy of product development in Malaysia.

Our next question comes from Doug Schenkel with Cowen.

So I'm just trying to reconcile a few of your comments. You talked about, I think, 35% year-over-year order growth for Q4, at least through last week. You've indicated that 85% of labs are open, but with varying levels of activity. So I'm just trying to, simply put, kind of figure out what -- how I actually triangulate between these data points and what we should drop into the model? It's important for Q4. It's also important as we kind of think about the trajectory heading into next year. So could you talk about specific to orders? Typically, how long does it take for an order to convert? And is there any difference in terms of the patterns you're seeing between capital and consumables? And then, simply put, you generated Q3 revenue numbers that were ahead of consensus expectations. Existing consensus, I believe, was for 18% year-over-year growth in Q4. If I just look at your commentary, which you volunteered on order growth in the quarter, is it fair to say that you are, not precisely guiding, but certainly indicating that you're comfortable with a bigger number than what the Street was modeling for the fourth quarter?

Doug, this is Justin. I'll start with that, and then we'll see if Brad or Serge want to add anything. As far as the 35% year-over-year order growth trend, really what we're doing is just sharing with you what we're currently seeing right now. And that's as of the end of last week, orders are up 35% from where they were a year ago. And that's been pretty stable coming out of the -- I guess, coming out of the first couple of weeks of Q4. And so we talked about some of the upsides and downsides that could materialize by quarter end. I do think that there is some danger in just fully extrapolating the 35% over the Q4 '19 revenue. Because at the end of the quarter, there's typically this seasonality, which results in a large number of orders coming through in the last couple of weeks. And we had that in Q4 of 2019, and we're uncertain to what degree we're going to have that in Q4 of 2020. And so we thought the best that we could do is to share with you what we were currently seeing and then also share with you the risks and opportunities that we see as well.

Doug, this is Brad. Maybe just add one of the other parts to your question is you really talked about the sort of sales cycle and the sort of forward-looking visibility. I mean, typically, right now, our sales cycles are less than 6 months. Obviously, as we get involved in maybe some larger orders, some potential moving into clinical studies, those take a lot longer because a lot more detail and contractual aspect to them, but overall, roughly about 6 months. And the only other risk that I would sort of add as we look at the fourth quarter, and we certainly experienced this is just moving freight around is a challenge as we go to recognize revenue around the end of the quarter because, ultimately, with the restrictions that are in place and, of course, those are changing, just sometimes you just don't have the flights to get stuff shipped out. So those are -- that's one other thing that tampers our forward looking view of our business.

Okay. And maybe just one more on these. I think I embedded it in my question, a question about capital versus consumables. In that order number, is there some -- is there a major difference between capital versus consumables? Or is it pretty much the same across the board?

It's pretty much the same. I mean, obviously, you have a repeat aspect of your -- of the consumables, but the only sort of thing I would say is that Chromium Connect of $260,000 has probably another -- a little bit longer sales cycle relative to the way that has to be approved. But even that, it's well within the realm of life sciences of that sort of 6-month time frame to see orders get through. And in some cases, in the U.S., it's a lot shorter than that.

Okay. That's helpful. And then just a couple or really just a two parter on ReadCoor. I'm just curious if the announcement of that acquisition has had any impact on discussions with really existing or potential new accounts? And then in terms of just time lines on the instrument launch, anything you could share on kind of the earliest we might see something from a new instrument standpoint on a stand-alone, non-NGS, non-alumina dependent sequencing launch via the ReadCoor acquisition?

So again, I'll answer the second question first, Doug. Look, we are -- as I've indicated, these acquisitions just happened. We are in the process of integrating the teams and the technologies. And so, again, it's too early to talk about any time frames or the specs of the products that could come out of this platform. I would reiterate we're generally, like fundamentally excited probably more so than even before we went into the acquisition. So overall, we're feeling bullish about the potential and where the platform is going to go. But again, I would caution that we're not -- at this stage, we're focused on integrating the platform and putting together plans for it, and we're not ready yet to talk about specifics. And I'll let Brad answer the customer dynamic question.

Yes, this is interesting because, obviously, even generally with Spatial but certainly with in situ, there's a general pull in the market because it's intuitively interesting in the MERFISH papers and some things that were out in 2014, 2015. So there's a lot of interest with -- CartaNA has a service business, and it's had some really interesting research that's been spawned from that. Certainly, customers seem to be excited because there's a view that we can take this technology and give it a 10x experience. And that's something that we're looking forward to doing. But again, a big part of what we're doing right now is just setting expectations. This is way out. And then -- but obviously, engaging the customers to understand what they're interested in and what it is about the technology that's going to help them answer pivotal questions in their research.

Our next question comes from Patrick Donnelly with Citi.

Brad, maybe one for you, just in terms of kind of the year-end look. You've mentioned a few times the budget uncertainty going into the end of the year, there's usually that, call it, budget flush. I guess what have customer conversations been around that? I'm sure you've tried to feel it out a little bit in terms of what customer expectations are going into year-end. So would love your perspective there. And then if you have it, it might be for you, Justin. Just the percentage of revenues that come maybe in that last month of 4Q? I know it's a bit outsized relative to your commentary about 2019. So if you had a ballpark on that, it would be helpful as well.

All right. So yes, let me give you -- we got the sort of the end of the quarter impact that somewhat result of COVID. We've got to see this early because the NIH had their end of the fiscal year at the end of Q3. And we certainly saw a tremendous amount of pent-up spending that couldn't have been consumed or spent while they were out of the labs. And as NIH came back, there was an interest. In fact, we had large interest on Chromium Connect because a walk away automation means a lot and they had money to bringing that to a reality. So as we look at the end of the fourth quarter, we have a lot of customers now that have moved, let's say, past the idea of getting back in the lab and now are really trying to make up for lost time. And lost time, in some cases, is spending money in case so they don't lose it. And this might be more of an evident even in pharma. We're seeing a lot of interest in bio pharma who have budgets that they want to consume to balance their year-over-year spend. So in general, I think people now -- I actually -- to be quite honest, I think this was slower than I expected. Back in early May, I thought once the lab started open, it would just move very quickly. It certainly took a lot, lot longer and most of Q -- well into early part of Q3. But now we've really seen that sort of, let's get back with get -- people are competitive, get papers out, post docs, people finishing research. So that -- it's -- I hesitated all to say business as usual, but it does tend to more of a dynamic in the market.

And, Patrick, this is Justin. I'll take the second part. We haven't shared before percent that would fall in the final weeks. But I can tell you is that typically, we see the orders pick up around the second week of December and carry through the end of the year.

Our next question comes from David Westenberg with Guggenheim Securities.

I just want to continue with that concept. I'm sorry, I ask a very similar question on last calls. But as we're going back and we looked at our models last year, labs are opening a little slower than usual, but wouldn't 2021 look like what we originally thought 2020 would look like, but with some added pent-up demand? And as we go out into 2021, or 2022, I mean we shouldn't not look relative the same? Now I get that we always have second wave of COVID, but as the same -- as we've discussed, NIH funding is exactly the same. And I realize that you guys have to be a little bit conservative here, but it seems like your customer base is almost exactly -- the reception of your product from your customer base looks pretty much actually maybe even ahead of what we thought to begin the year.

A lot of questions embedded in that, David. I would say if your question is around what does 2021 look like and whether it's sort of bouncing to back to what the year would have been without COVID? I think that would be certainly pretty much sure to view it that way because there's also quite a bit of essentially lost time that happened in 2020, right? If you think about sort of research and customer dynamics.

Slightly less placements.

Yes. So I mean the reduced placements, people who have not run the experiments and some of those experiments, certainly, there is some amount of pent-up demand, but there's certainly some experiments that are just sort of gone. So I don't think you can sort of just kind of imagine the bounce back completely to the way it would have been otherwise because we have lost some time.

Okay. All right. I'll move on maybe to follow up a little bit offline on that. Just in terms of sizing the TAM for ReadCoor, I appreciate that this is going to take a little bit of time, but do you feel like when you sized the TAM before the acquisition? Did you use it -- the volume that you'd see in, say, FISH, IHC and just kind of apply a premium to that in terms of how we size the market? Because, to me, it seems like this is a little bit beyond the reach of sequencing and more on the microscopy market, but with a plus premium to it? And then in terms of sticking with FISH and seq, you've locked up a lot of technologies with this. Do you feel like -- with all the patents you've acquired, you pretty much locked up FISH, seq as a spatial technology?

So I would say in terms of size in the market, I think you're on the right track. I mean that's really how we've looked at things for sure. I think there's -- again, the potential of this market is quite enormous because, again, you're bringing a lot more content and information that could be extracted from these samples. So in terms of locking up FISH, seq, yes, I mean, for sure, but I would say it's more broadly than that because these ideas, they cover in situ more broadly than just than FISH seq, but the all kind of all the other major approaches as well.

Our next question comes from Dan Arias with Stifel.

Serge or Brad, for new Visium customers, are you guys able to ship product to the lab and then have them get up and running through a remote support effort? Or do you find that there's generally some in-person handholding that's needed there? I'm just wondering if the lack of an install and training need is kind of proving meaningful for you guys in the current environment, access restrictions and such?

This is Brad. I'll take that. So with Visium, we never -- given that we contemplated a much wider use case, given there was a relatively low barrier to entry, obviously, no instrument, we actually plan to do this entirely virtually when we built the tools to do that. So it really hasn't changed anything. So we were able to onboard customers. We do that with a fairly extensive, usually multi-part hours of sort of online steps or training that the customer goes through on a self-paced level. And then we actually have an FAS that will engage them, again, now virtually over almost a full day, just making sure we get them up. And then we obviously follow them as they adopt to technology over the coming weeks.

Okay. Helpful. And then maybe just -- can I ask about some color on the V2 immune profiling kit? Where are you seeing initial traction? I'm not sure if you want to put a dollar amount on what you're seeing there, though I would certainly listen, if you did. But can you just sort of help us maybe with some context on the contribution potential versus some of your other assays or kits? And maybe whether we should think about 4Q contributions being up quarter-over-quarter just given the pace of COVID work, et cetera?

Well, yes. I mean you stuck on didn't have the particular utilization, obviously, infectious disease. But in general, our immune profiling product has been growing quite nicely as it's, again, has a lot of applications. But in general, I think that what we saw in this quarter was the fact that, and I was alluded to -- or Serge alluded to it, that we had people that immediately had been using version 1 for a long time, immediately transitioned to version 2 without any sort of testing. And we saw a little bit of that when we did the same thing with our gene expression product. But I think people now and a lot of them are the same customers have trusted the fact that the product would work accordingly. And it does give them a lot more sensitivity, but then also the flexibility that they want to save on sequencing and they can do it to it. So again, exactly the same thing we had with gene expression. The other thing that's important about this is that we had been very reluctant to move some of our legacy GEM again, an immune profiling on to Next GEM because we knew we had this version 2 coming, and we didn't want to push them down a path of making a switch and then being -- taking that product away from them. So now that we've done this, this really clears the way so that we can be essentially 100% cut over from legacy GEM by the end of the year.

Okay. And then if I could just stick one more quick in there maybe for Serge. Just on in situ, within the body of work that exists today, is the focus more RNA, DNA or protein? I'm sure it's mixed, but I'm just sort of curious about where the foundation is being laid or has been laid there.

Yes. I don't think we're ready to talk about those yet. I mean most of the work, if you look at what the companies have actually shown data for and worked on tends to be RNA focused. But as far as what we're planning for the future, that's too early to talk about.

And our next question comes from Tejas Savant with Morgan Stanley.

So just going back to the COVID impact question. Brad, can you talk about sort of any specific pockets of impact from the resurgence, especially in Europe? One of your competitors called out a little bit of a headwind there. And I think you mentioned earlier sort of shipping and freight issues, particularly across borders and so on. So I was wondering if you're actually seeing signs of that? Or is that just something that could happen and, hence, you're being a little bit conservative in terms of framing the fourth quarter here?

So as far as the headwinds, obviously, we're watching this and a lot of this is very on a daily basis. But so far, we just have not seen, as I said earlier, that we are seeing any labs shutdown or close. And in fact, I think, over time, the efficiency of people learning how to work in a reduction. And see, a lot of the times we're using labs, we say, labs at 25%. That just means that only 25% of people can be in that lab at any one time. They're able to use rotation and get back up to some reasonable capacity. So we continue to see that happening, as I think Justin has already described that. In terms of around it given quarter, it's always a challenge. There's always a challenge sometimes in moving product out. We love our customers to order earlier. At the end of the quarter push is there. And then, yes, we definitely, at the end of Q2 and certainly the end of Q3 had to be a lot more careful in planning shipments and as much to make sure that we meet our commitments to our customers. So I don't think there's anything hugely acute with fourth quarter. I wouldn't -- I'm hoping that it wouldn't be any worse than what we experienced. I think Q2 is probably the biggest challenge -- the Q2 to Q3. But it's just something we've got to be well aware of as a risk.

Got it. That's helpful. And then in terms of what you're seeing out of Asia, I mean, specifically China, I mean, I think it's high-teens sort of revenue exposure for you, if I'm not mistaken. Can you just walk us through the pace of the recovery and the path to normalization specifically in China?

Yes. It's amazing. China has done almost, I would say, sort of effectively 100% in the context of the fact that people are opening, or labs are open. We're making sales calls, people are going to conferences, and so that is good. There is a little bit of a disruption in the funding as the government repositions. So they can do sort of massive testing when they deal with some of these outbreaks. But in general, we feel like China has kind of reached back to where it was ahead of the COVID, which was about a year ago, if you think about it.

Got it. And then one final one on Chromium ASPs here. Justin, in the past, you've spoken about sort of a degree of discounting with larger consumables purchases. How should we think about that specific driver of the model for you when we sort of juxtapose it with the Chromium Connect launcher? Obviously comes with higher ASPs. And I think on an earlier call, you guys had mentioned sort of the walkaway automation being particularly attractive during the pandemic. So how do we balance sort of those two opposing forces as we think about ASPs over the medium term here?

Yes. So for ASPs, we had talked about in the past how, during Q2, we gave deeper discounts primarily related to sales where the instrument was going to be used in COVID research. And historically, we have given larger discounts when it's attached to a larger consumable order. But if we look at just the Chromium controller by itself, the ASP actually increased from Q2 to Q3 because a smaller percent of our business was driven by COVID sales. But then when you combine and calculate an ASP off of the Chromium Connect and the regular Chromium controller, obviously, with the list price that's in the mid-200s for the Chromium Connect, that's going to bring the ASP up. But still, when you look at the overall percent of the Chromium Connect, overall percent of all instruments sold, it's still a -- it's a relatively small number. So it does have some impact. And we're still basically staying within the range that we -- near the range that we've talked about in the past in the $50,000 to $55,000 range on a blended basis.

And I'm showing no further questions in the queue at this time. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.