Offerpad Solutions Inc. (OPAD) Q3 2026 Earnings Report, Transcript and Summary

Good afternoon, and welcome to Offerpad's third quarter 2026 earnings conference call. My name is Megan, and I will be your conference operator today. At this time, all participant lines have been placed on mute to prevent any background noise. After management's prepared remarks, we will open the call for a question and answer session. If you would like to ask a question, please press star followed by the number 1 on your telephone keypad To withdraw your question, press 1 again. With that, I will turn the call over to Cortney Read. Offerpad's vice president of investor relations and communications.

Good afternoon, and welcome to Offerpad's third Quarter 2026 Earnings Call. Management's remarks today are prerecorded. And a live question and answer session will follow. During the call, management will make forward looking statements as defined in the Private Securities Litigation Reform Act of 2000. Forward looking statements are inherently uncertain, and actual events could differ significantly from management's expectations. Please refer to the risks, uncertainties, and other factors related to pad's business described in our filings with the US Securities and Exchange Commission. Except as required by applicable law, Offerpad does not intend to update, or alter forward looking statements as a result of new information, future events, or otherwise. Management will also refer to certain non GAAP financial measures. Reconciliations of these measures to the comparable GAAP measures are available in the financial tables of our third quarter earnings release on Offerpad's website. With that, I will turn the call over to Brian Bair, chairman and chief executive officer.

Good afternoon, and thank you for joining us. Before I discuss the quarter, I want to share 2 leadership updates. Andrew Pieper has been appointed interim chief financial officer. Succeeding Peter H. Knag. I am excited to have Andrew step into this role. He brings more than 22 years of public company accounting and financial reporting experience. Since joining Offerpad in 2021, he has led our accounting operations, SEC reporting, and audit processes, and he built the reporting and controls foundation that took us through our transition to a public company. He knows this business and our financials exceptionally well. Andrew will discuss our financial results and outlook later in the call. Also joining Andrew and me on today's call is Roberta Galaviz, our vice president of financial planning and analysis. Roberto will work closely with Andrew, drawing on his experience leading FP and A and supporting our operating plan. Secondly, we welcome Ben Grabowski to our board of directors during the quarter. Ben brings deep experience at the intersection of real estate, data, and technology. His perspective will be valuable as we advance our data and AI capabilities and apply them to improve decision making across the business. Turning to the quarter. Revenue was $78.1 million, below the $90 million to $100 million outlook we provided in August. We closed 324 real estate transactions. Compared with our outlook of 350 to 400. Adjusted EBITDA was a loss of $7.5 million rather than the improvement we expected. At the same time, transactions increased for the second consecutive quarter and more than 1/3 of our closings came through brokerage services and Cash Offer Marketplace. When we provided our outlook in early August, average 30 year mortgage rates were about 6.7% and they stayed near that level into early September. Then they rose sharply. To approximately 7.4% by early October up about 70 basis points and the highest level since November 2023. We have operated with mortgage rates above 7% before. What was different this time was the speed of the move late in our quarter and the attention it received. Housing affordability had become a national story. In the news, in political debate, and across social media. Buyers and sellers watch the market change in real time. With headlines describing it as a buyer's market. Buyers weighed higher monthly payments against the possibility of a better deal. While sellers faced uncertainty about how long their homes would take to sell and what price they could achieve. We believe that combination contributed to a more cautious market as quarter came to a close. We felt that caution across our platform. Most directly in slower home sales. Which were the primary driver of the shortfall. And also in the conversion across other channels for a period. We have adjusted our acquisition pacing, our resell strategy, and our spending accordingly. Last quarter, we said we were increasing acquisitions. And we did by acquiring 605 homes in quarter 3. We also had additional homes under contract that could have increased that total. As market conditions shifted, we have reevaluated them against our wider margin requirements and chose not to proceed with homes that no longer met our criteria. Where possible, we offered those sellers an alternative through cash offer or broker services. Buying well is only half the process. On the selling side, our priority is converting this inventory into completed sales. So far in the fourth quarter, 200 homes have sold or are under contract for sale. Our current portfolio is healthy. Most of it was bought within the last few months. Aged homes represented only 2.6% of our inventory at quarter end, and inventory valuation adjustments on homes we hold were minimal. These homes give us a pipeline of sales to the rest of the year and into early 2027. Even as buyers became more cautious, and activity slowed across our channels, for a period, our fee based channels continue to grow for the quarter. Total transactions increased for the second consecutive quarter from 263 in Q1 to 295 in Q2 and 324 in Q3. Brokerage services and Cash Offer Marketplace represented approximately 35% of Q3 closed transactions. And brokerage listing signings more than doubled from the prior quarter. Together with continued cost discipline, these channels give us more flexibility in how we grow and work towards positive adjusted EBITDA. Profitability remains our No. 1 priority. And nothing about that has changed. What has changed is the timeline. The shift in the market has pushed our path out and we now expect to exit the second quarter of 2027 at a positive adjusted EBITDA run rate. For some time, we have pointed to roughly 1 thousand transactions per quarter as a reference point for positive adjusted EBITDA. As market conditions have shifted, we have adjusted our underwriting to build wider expected margins into each purchase. A home bought at a wider margin can contribute as much profit as 2 homes bought at thinner margins. It uses less capital and carries less risk. We are also reducing operating expenses and growing Cash Offer Marketplace and brokerage services. Together, these actions give us the opportunity to reach positive adjusted EBITDA with fewer transactions than before. Andrew will walk through the cost reductions in more detail. These are actions within the same operating framework we previously shared. Disciplined transaction growth, contribution margin expansion, and operating leverage. Adapted to current market conditions. For homeowners navigating an uncertain market, having options and control over their next move matters. A cash sale can offer clarity and convenience. While Cash Offer Marketplace and brokerage services provide other ways to sell. Offering these choices is central to Offerpad's model in creates a meaningful opportunity for our business. Our focus is to serve more sellers, deploy capital selectively, and advance our path to profitability. With that, Andrew will take you through our financial results liquidity, and updated outlook.

Thank you, Brian. As I step into this role, my priorities are straightforward. Focus on our path to profitability as we convert our inventory into cash, and continue to optimize our cost base. Brian covered the third quarter's results and the market. I will focus on our unit economics, the balance sheet and our outlook. During the third quarter, gross profit was $6.5 million. And gross margin was 8.3%. Per transaction economics dipped from Q2, but remained well above a year ago. Contribution profit after interest was approximately 12.9 thousand per real estate transaction compared with 13.5 thousand in Q2 and 6.4 thousand a year ago. Renovate generated $5.2 million of revenue, up from $4.8 million in Q2. Renovate contributes to the overall results, but is excluded from our real estate transaction count. Operating expenses excluding property costs were $13.7 million. Compared with $13.3 million in Q2. Net loss was $11.5 million and adjusted EBITDA was a loss of $7.5 million compared with a loss of $6.2 million last quarter. After 2 quarters of sequential improvement, the decline in Q3 adjusted EBITDA primarily resulted from the resale pullback. As we have highlighted before, we have reduced operating expenses by more than $140 million since 2022, and that work is continuing. This quarter, we identified an additional $8 million to $10 million in annualized operating expense reductions. We have already begun implementing these actions with some benefit expected in Q4 and the full annualized savings expected during 2027. Those savings, along with selling through the inventory we built in Q3, and higher return purchases flowing through, are the drivers behind our expectation to reach positive adjusted EBITDA run rate as we exit Q2 2027. Turning to the balance sheet. We ended Q3 with $12.1 million in unrestricted cash, compared with $33.1 million at the end of Q2. And an estimated $55 million of equity in our 684 homes in inventory. The decrease in cash primarily reflects the capital deployed into that inventory along with cash used to operate the business. That capital has not left the business, it is sitting in our homes, and it comes back to us as they sell. With acquisitions now intentionally reduced, we expect sales to meaningfully outpace purchases in the coming months. Each home we sell repays its financing and returns our equity to the balance sheet. So we expect our cash to rebuild as inventory comes down. Together with the cost reductions we have identified, this is the primary way we expect to fund the business through our path to profitability. We have also recently improved our inventory financing. Our lenders now fund a larger share of each home's cost, so less of our capital is tied up in every home that we buy. That makes our capital go further and it helps it return to the business faster as homes sell. At quarter end, we had approximately $251 million of undrawn capacity under our inventory financing facilities, the majority of which is uncommitted. We believe our cash, the capital we expect to return as home sell, and our inventory financing are sufficient as we execute our 2027 plan. We also remain open to opportunities to strengthen our balance sheet. Including strategic capital partnerships, and we will be disciplined about the structure and cost of any capital we add. For the fourth quarter, we expect 400 to 475 real estate transactions. And $100 million to $120 million in total revenue. We expect adjusted EBITDA to improve sequentially from Q3. That outlook is supported by the inventory we built in Q3, including the 200 homes sold or under contract so far during the fourth quarter, and continued growth in brokerage services, and Cash Offer Marketplace closing. It also assumes rates remain near current levels and no rate relief. In closing, I am excited to step into this role. Since joining Offerpad in 2021, I have led accounting and financial reporting, and worked closely with teams across the business. That experience gives me a detailed understanding of how our operating decisions flow through our financial results. From acquisitions and inventory to dispositions, and costs. I know shareholders are focused on the current market, the capital in our inventory, and our path to profitability and so am I. I am confident in where we are headed because of the strengths we have across the business. Our products give homeowners real choices. We have a strong experienced leadership team and an accounting and finance team that brings real and deep knowledge of this business. We have capital partners who have supported us and continue to expand their relationship with us, I am committed to strengthening those relationships further. With that, we are ready to take your questions.

At this time, I would like to remind everyone, in order to ask a question, press star then the number 1 on your telephone keypad. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Ryan Tomasello. Your line is open. Please go ahead.

Hi. Thanks, everyone. Wanted to ask about the fee based products. The. It looks like the Cash Offer Marketplace and Brokerage transactions were about, I think, our math, 114 in the quarter. Can you tell us what the breakdown of that was between those 2 products? And then also going into the fourth quarter guidance, how should we think about that 35% of fee based transactions? what is being embedded there in 4Q and into early next year? Thanks.

Hey, Ryan. This is Roberto. Yeah. So on that 114, majority of that came from the HomePro side, so majority on the listing services. Cash Offer Marketplace, we are still seeing some growth there. But majority going into Q4, we still expect to be from the HomePro side. On the mix side, we have talked about the 50 in the past. We are still looking to get to about that range. Over the next quarter, we expect that we are still going to see more sales on cash offer, driving the volume side, but we do expect on the contribution side, because of our higher margins that we are building into those properties, that rate's going to start getting closer to. or going to be on the higher side on the 60 to 70% range. We do see HomePro. You know, we highlighted the prepared remarks that we grew about know, doubled our listing signed, so we expect to see more growth into the Q4 from that. So volume wise, well, that rate is going to go towards the 50 sooner rather than later on the contribution side, we expect that cash offer is going to continue to lead for a couple quarters.

Great. Thanks for that. And then in terms of Brian's remarks, just around the prior target of 1 thousand transactions a quarter driving breakeven. It sounds like you are hopeful that with wider spreads here and adding in these additional cost efficiencies that it sounds like that can move lower. Any way to frame how you are thinking about the new run rate breakeven in terms of real estate transaction volume? Thanks.

Hey, Ryan. it is Brian. Yeah. The. You know, we were making-- had really good progress as we talked about last earnings with our velocity buying. With scout buying in the areas that we that we really liked. Which the good news is our portfolio was really strong. Right now, we do not have a lot of tail in inventory, and so I really like what we have. But because we had to, pause some of the buying for a little bit, pull back, it is obviously pushed us off to a couple. another quarter or 2 before we can get profitability. But we are making really good progress with the asset light services on that side. So the thousand was kind of indication we looked at a thousand transactions with our 3 product lines. But with the wider margins and the cost reductions, to your point, it does there is different ways to get there. Andrew, if you want to add anything on that side.

Yeah. I will jump in there too. Hey, Ryan. Thanks for the question on it. As Brian just mentioned, and you hit on it as well that cost savings that we have identified along with our current contribution margin level, we expect that will help reduce the number of transactions that will be required to get us to breakeven. Roughly about 150 to 200 transactions. So that will be moving the thousand real estate transactions per quarter down to about 800 or 850 per quarter. Also, wanna highlight as well that as our contribution margin improves, that number of transactions will come down even further, especially with the higher margins that we built into our cash offer underwriting more recently.

Yeah, the 1 other thing I will say on that Ryan is and I said in the prepared remarks, but definitely seller mentality has changed. And, you know, we have seen this thing evolve over the last several years, but I think this is the very first time that we have seen it that most. A majority of the sellers know it is a buyer's market. They are seeing listing that active listings around their areas continue to increase. And so the good part about that is that we can buy at wider margins. And be more selective about what we are acquiring. Of course, you know, what we have to be very-- is making sure that we are buying the right type of product in the right areas. And so we are continuing to stick with the interior homes. You know, the outline areas are definitely impacted more than most areas. And so our portfolio still consists of interior homes, newer, not as much renovation. Of course, we still have renovation, but the $100 thousand renovation projects, that we have done in the past, we are not looking to do it right now.

Thanks for all the talk.

Your next question comes from the line of Dae Lee. Please go ahead.

Great. Thanks for taking the questions. So first 1, you guys touched on that a little bit, but this is not the first time you have seen rates kind of spike up. In a short period of time, and you guys have gone through let's say, a few iterations of this. Just wondering, like, how does this step up feel different from the ones you have experienced in the past? And how do you feel about the shape of the business as you go into another what could be a potentially challenging higher rates buying and selling environment.

Yeah. You know, we. We have operated at the plus 7 in the past. Where this 1 was unique is towards the end of the last quarter. Just the speed of. We saw mortgage rates above 7.5 and in a really quick period of time. So for buyers that did not have their rates locked in, it was extremely impactful to them. And so I would say. It reminded me because they kicked this thing off a few years ago when we saw the acceleration from about 3.5% to 7. Was not as drastic, but it was very, very. we. That we went from the mid sixes to the mid sevens in a really quick period of time. And I think across the board, just from some of the other news that have been out there from the affordability perspective and again I mentioned this in the prepared remarks, but I think it is important to point out again, but you know as you are seeing in social media and, you know, news programs and things are leading with the affordability and home prices and so I just think overall, you saw a really quick acceleration of mortgage, mortgage rates. And then you are just seeing more people at the affordability perspective that impacted them, you know, besides gas and across the board, but we have seen a little bit of that over the last few years. And so, the 1 thing that we continue to do is that we are going to control what we can control, and that is the inventory that we are buying. Where, you know, as anything that we balance sheet, we are going to be highly selective on what we are going to buy. But in parallel to that, I think I mentioned before, we have doubled the amount of other cash buyers in our Cash Offer Marketplace and so for example, anything that Offerpad does not want to buy, for example, if it is solar panels that we do not wanna buy in a certain area, we will have other cash buyers that are willing to buy that home that has solar panels or outlying areas And so we still wanna provide the cash offer. it is not Offerpad's cash offer, somebody else's cash offer, and then give back the seller choice if they can list that home if they want. But you know, yeah, we are watching it now. Now, since that, we have seen an ease of a little bit of the mortgage rates from the, you know, almost a 6 range to now, you know, in the in the 7, you know, 7 and a quarter, the 7.5, the little bit below 7.5. And so, and I have mentioned this, I know, the last few times we talked, but that sensitivity of 25 bps is just incredible what it does from showing activity to active inventory just across the board. And, you know, as we talked about, like, with Scout, Scout identifies where and where we should be buying along with Henry. So that technology is great but and so it identifies velocity areas we should be buying and are considering all of the macro environment in those areas. And in a really quick period of time, we saw a lot of those areas started to shrink up because what happened is more inventory hit the market. You had more sellers that put their home in the market that were not transacting as fast as we have seen in the past. And so that. that is where this was the impact on that and so anyway. But we have seen it normalize a bit, come down a little bit, but yeah. But we are trying to be as prepared as we can for all the volatility we are seeing out there.

Got it. I guess as a follow-up, kinda mentioned the with rates coming down, but I guess a lot of efforts to improve affordability. Sitting-- I mean, I guess from your seat, do you feel like there is enough work is being done to help with affordability? And if there is, like, what are you most hopeful for? Is it just rates, or is there something else? That can work here?

Yeah. Liz, I think the affordability overall, like I said, this is a little bit of a perfect storm because buyers are not getting the relief anywhere. You know, whether it is diesel gas prices to normal gas prices to the war and tariffs and every-- Everything else that is going on out there. And so and the salaries are not keeping up with it. Of what is happening. And so, what-- if I had a magic wand, I love the portable mortgage concept. I think a 1-time move where people could trade out of their current home and keep the same mortgage rate would be incredible. I know there is been, I have been talking to anybody and everybody who would listen about, I think that would give the market a relief and people of what time can kind of get out and either upgrade or downgrade their home Because right now, you just, again, have the sellers that do not wanna leave their current rates, and you have buyers that cannot afford their new rates. And so, not that is the perfect answer, but is the answer. So I think mortgages that. And just getting if you look at just the impact of rates, I mean, just to make it in real life, I mean, that is about a 150. So when mortgage rates go up from, you know, just take a base scale from, you know, 6.5 to 7, and they go up to, you know, 7.5 plus, about a 150 to a $175 a month. And then when you add a little bit as, you know, from a. From the other affordable with grocery prices and everything else adding in there. it is just you know, there is an off button somewhere in there for buyers on that perspective and so I definitely. it is a long winded answer of saying I definitely think rates impact everything, you know, incredible right now, but I do think there is some other relief that is out there with other things coming down to give people that even another $100 to $150 a month is super impactful so people can qualify to get a house or their first house.

Got it. And then just a last follow-up. To Andrew if I can. When you guys talk about reaching adjusted EBITDA on a run rate basis by the end of Q2 of 2027, Is that more driven by the seasonality of the business improving into the home buying season, or are there other factors that can affect that target?

Yeah, Dave. Thanks for the question. Seasonality into that for sure. But, what we are really seeing more is on we are talking about the cost reductions in the business and how that will ultimately flow through and get to that point, with the rates that Brian's talking about and the impact that is having on the buying and selling side. As we flow that through and as that gets into the cost side, we will have that adjusted EBITDA with the metrics falling out in Q2.

Got it. Okay. Thank you.

Thanks.

Again, if you would like to ask a question, please press star then the number 1 on your telephone keypad. Your next question comes from the line of Gaurav Mehta. Your line is open.

Thank you. In the in the earning release, you mentioned that you bought in Q3, you bought the homes in the markets where you were still seeing, I guess, the markets that are meeting your requirements. Can you maybe comment on which markets where the home purchase is focused on?

Yeah. So we-- and that is where some of the volatility we have seen because we have Charlotte, Raleigh areas, the Florida markets have been they have been pretty. I do not wanna say steady. that is a bad word to use, but we. We have had a good appetite in those markets. You did not see the home price acceleration. You have seen more consistency there. But we are definitely seeing a slowdown now, in those markets. The Houston and Dallas markets it is getting impacted by just by new builds, by builders. it is hard to avoid builders and they are their buy downs and some of their special financing in those areas. So as we look at it, that continues to be a market that we can stay pretty consistent in that we are seeing some good activity in. The Phoenix market, the Phoenix is a little bit of a mixed bag. You know, we in Phoenix, you see over 28 thousand active listings. In Phoenix. You see a lot of inventory. Those are more higher end. But the right the right price points and in the interior, we still continue to see them move. And so the. it is been a very unique you know, and interesting enough about a year ago, Tampa was probably the slowest market that we saw. Now we see Tampa inventory moving fairly well in the Tampa market. And so besides the volatility of the market and interest rates, it is been interesting to watch, you know, a lot of these are job growth specific. You know, we are watching even, just a quick example. We have to be we have to, you know, watch where data centers are getting built. it is creating great jobs. But, you know, some people say it can cause noise and water shortages and other things as well. And so we are we are staying hyper focused on just. So when we say pockets, we are getting very specific with the pockets of where we are going to buy. And staying patient. And if we do not wanna buy it, maybe somebody else does in our marketplace. Or cannot make a cash offer on it. But, you know, that is where we. I think we will continue to see listing growth over time because we can provide listing services to the people that cash off or does not work for various reasons.

Okay. Thanks for that color. I also wanted to follow-up on some of the cost savings that you talked about. Can you maybe break down for us your expected to realize those $8 million to $10 million additional OpEx savings?

Yeah. I will talk and then maybe have Andrew come in here. But just from a high level, the 1 thing that, you know, the buying homes at volume especially at, you know, balance sheet homes at volume, is great. it is our core business, but we are not buying this many. We can we can reduce. We do not need as many people, and we are not buying as many homes. Just that simple. But you really, if you parlay that into our technology as far as what we have done with Henry, specifically, from being able to do automated offers a lot of data like picture recognition, and the inspection process, being able to get really efficient on and using technology to leverage that. And then also the other products as we talk about with, like, the HomePro product, that we have agents. These are 98. 99 agents. And so we can scale and grow that without really the balance sheet being affected, and we can. And scale and give customer a great experience. there is some cost, but not nearly the cost as the acquisition side. And the Cash Offer Marketplace is great because we run through the exact same system, use the same technology, but instead of balance sheet, we have somebody else's balance sheet. But, Andrew, I do not know if there is anything that you want to add there.

Yeah. Thanks, Brian. So as you mentioned, you know, we will we will have the head count realignment, as we move towards more capital light. And our tech re optimization We also identified some additional expenses associated with the realignment of our office space facilities and we will get some savings there as we move forward. And then there is just some other general operating spend that we have identified as well. Now as it relates to the timing of those, some of that benefit, what we have already started to see in Q4 but the full impact and the full annualized savings from that will hit in 2027.

Alright. Thanks for that color. My last 1, I think you also talked about adjusting your acquisition criteria for higher expected returns. Can you maybe provide some more color on how you expect to achieve higher returns on acquisitions?

Yeah. Simply what we are doing is from an ROI perspective, we are we are backing up the. From a time to cash perspective, like what we have right now and currently in pending, I think we are gonna hit our time to cash. But as we continue to go, especially with seasonality and market conditions, we are gonna expand, how long we are gonna own those homes, maybe from a 100 to a and 20 days, but simply what also the assumptions. That we put in there. So potentially what we need to make to balance the risk factor of us buying the home, but also some of the other costs that go in there, you know, from closing costs and all those. And so it. Fundamentally, it is. If you look at the ROI that we need to expect, to make on that home and just calculating for the risk metric, And so just to kind of put that in there, we are underwriting right now almost double what we were just a couple months ago on the underwriting perspective. And so, you know, that naturally slows down volume, but we are okay with that. And in these market conditions, but then have other products we could connect them to We wanna make sure we can capture them either through another cash buyer that is in our marketplace and or, using our listing service.

Alright. Thanks for that thanks for that color. Maybe if I can ask 1 more. Can you maybe comment on, I guess, you know, the demand that you are seeing for renovation and maybe asset light businesses? Are you still seeing demand for, like, the fee-light business and, or has that been impacted by high rates as well?

Yeah. Well, on the renovation specifically. So here's the good thing about renovation is that when we kicked off renovation, it was it was doing renovation for a lot of larger institutions. Companies buying at scale and buying a lot of homes. Over the last you know, few years specifically, we have-- so we are doing renovations for very small groups, even some groups that buy 1 to 5 homes a year. So we have we have gotten way down the funnel. And of course, we have some of the mid sized groups in there as well. But so the thing that you know, that makes me excited about the future, this is across the board, is that you know, we are laser focused. We wanna get profitable. that is that is what that is what Andrew and I and Roberto were talking about every day. What cost we build out? We have got to go execute. We have got to get profitable. Then as we go, we want to go grow and scale this. You know, every renovation customer that we are working with, And, you know, we are we are very self aware. We are reaching out all the time. What could we do better on the renovation? Side? Is there anything we are missing? Is there anything, you know, and we are seated in our own in our own business, and we want to expand that. And I will tell you that people love using us and because they can really just plug in to our operation on that end of it. But as they start to scale up again, as the market starts to turn, they are going to scale with us. And then as the success of Cash Marketplace, as we get more cash buyers in there, especially the lower tier cash buyers, Sorry. Lower volume cash buyers. They are not gonna buy as many homes but they need more of our services. And so, not just the sourcing that we could provide them, but also using our renovation services. And so it all ties together and as we scale, I mean, there is no other way to say you guys that this environment, especially over the last 60 days, has been I think it shocked the system a little bit. It did not just shock Offerpad. It shocked a little bit of everybody of what is happening. You know, as we know in real estate, these are all these are all just, you know, these are temporary moments in time. And so we want to establish great relationships, do a really good job for all of our partners, and then as they scale up, we will scale with them.

So we can 3, 4, 5x very quickly every 1 of our other product lines. Alright. Thanks for those details. that is all I had.

Great. Thank you.

There are no further questions at this time. This concludes today's conference call. You may now disconnect.