Welcome to the PacBio’s Second Quarter Fiscal Year 2022 Earnings Call. All participants will be in a listen-only mode. After today’s presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would like now to turn the conference over to Mr. Todd Friedman, Director of Investor Relations. Please go ahead.

Good afternoon and welcome to PacBio’s second quarter 2022 earnings conference call. Earlier today, we issued a press release outlining the financial results we will be discussing on today’s call, a copy of which is available on the Investor’s section of our website at www.pacb.com, or as furnished on Form 8-K available on the Securities and Exchange Commission website at www.sec.gov. With me today are Christian Henry, President and Chief Executive Officer; and Susan Kim, Chief Financial Officer. Before we begin, I would like to remind you that on today’s call, we will be making forward-looking statements, including statements regarding predictions, progress, estimates, plans, expectations, intentions, guidance, and others, including expectations with respect to collaborations, cash flow, and product and technology launches. You should not place undue reliance on forward-looking statements because they are subject to assumptions, and risks, and uncertainties and could cause actual outcomes and results to differ materially from currently anticipated results. These risks and uncertainties are – as well as other risks and uncertainties are more fully described in our press release earlier today and in our Form 8-K, Form 10-Q, Form 10-K and other filings with the Securities and Exchange Commission. We disclaim any obligation to update or revise these forward-looking statements except as required by law. During the call, we will also present certain financial information on a non-GAAP basis. Management believes that non-GAAP financial measures, taken in conjunction with U.S. GAAP financial measures, provide useful information to compare our performance relative to forecasts and strategic plans and to benchmark our performance externally against competitors. Reconciliations between U.S. GAAP and non-GAAP results are presented in tables within our earnings release. In addition, please note that today’s call is being recorded and will be available for audio replay on the Investor’s section of our website shortly after the call. Investors electing to use the audio replay are cautioned that forward-looking statements made on today’s call may differ or change materially after the completion of the live call. I will now turn the call over to Christian.

Good afternoon, everybody. I appreciate you joining us today. On today’s call, I’ll provide an update on our 2022 revenue outlook, highlight our results for the second quarter of 2022, discuss some recent business and commercial successes and then will ask Susan to get into our financial results and guidance in more detail. September will mark my two-year anniversary at PacBio, and in that time, we have undergone a remarkable transformation. First, we’ve been able to build a talented and experienced team to lead the company and execute a strategy that will leverage our technology and commercial scale to serve our customers around the globe and drive growth. We also acquired Omniome and Circulomics adding core products and technologies to our portfolio. As a result of these acquisitions and through our aggressive product development investments, we expect to be the first company to commercialize both highly accurate long read and short read technologies, providing our customers with the right product for their application of interest and, as a result, serving the entire genomic sequencing landscape. Additionally, we believe that our portfolio will create significant value for our customers as we provide them with the capabilities required to discover novel biology with unprecedented detail at compelling scale and economics. We have not only invested in developing new technologies, we’ve also continued to improve our highly accurate Sequel IIe platform to provide even more customer value. For example, just this past quarter, we launched the ability for our customers to look at epigenetic markers with each sequencing run for no additional cost. Compared to various short read sequencing technologies, this feature dramatically simplifies the ability to see epigenetic markers because the workflow doesn’t require multiple sequencing runs with different sample preparations to capture all the data. We’ve also collaborated with leading organizations…

Thank you, Christian. As discussed, we reported $35.5 million in product and service revenue in the second quarter of 2022, which represented an increase of 16% from $30.6 million in the second quarter of 2021, and 7% sequential growth compared to $33.2 million in the first quarter of 2022. Instrument revenue in the second quarter was $15.6 million, an increase of 9% from $14.3 million in the second quarter of 2021. In the second quarter, we modified our agreement with Invitae and recognized $3.7 million in instrument revenue related to Sequel IIe delivered to Invitae in the quarter. We delivered a total of 36 Sequel II and Sequel IIe systems during Q2 growing the install base to 460 systems as of June 30, 2022. Turning to consumables, revenue of $14.6 million in the second quarter grew 19% from $12.2 million in the second quarter of last year. And Sequel II and Sequel IIe consumables represented approximately 86% of total consumable revenue in the second quarter, with the rest from older systems and other consumables. Annualized pull-through per system on the Sequel II and Sequel IIe installed base in the second quarter was approximately $120,000. Headwinds from pandemic-related lockdowns in China, continued through most of the second quarter. Additionally, new customers have been taking longer to get up to full speed as supply chain constraints have affected other inputs in customers’ workflow, such as servers and automation equipment. Finally, service and other revenue grew to $5.3 million in the second quarter compared to $4.1 million in the second quarter of 2021 reflecting our growing installed base. From a regional perspective, Americas had a record quarter with revenue of $21.7 million and grew 51% compared to the second quarter of 2021. We shipped Sequel IIes to a growing and diverse set of…

Thank you, Susan. I hope your takeaway from our prepared remarks today is that PacBio remains extremely well capitalized and well positioned to execute on our strategy despite the short-term volatility and uncertainty we see in the market. We sit in front of a huge multi-billion-dollar market opportunity with multiple technologies that we believe will uniquely position us to provide customers with products capable of delivering genomic insights unimaginable with the current status quo of sequencing. We look forward to engaging with our customers at ASHG in late October. And with investors, we hope to connect at the many conferences lined up in Q3 and we’re hosting our first Analyst Day in November, which we will be sharing details about next month. Now, with that, I’d like to turn it back to the operator so that we begin the Q&A.

Thank you. We’ll now begin the question-and-answer session. Our first question comes with Ross Osborn with Cantor Fitzgerald. Please go ahead. It appears Ms. Osborn has disconnected. So our next question comes with Kyle Mikson with Canaccord. Please go ahead.

All right. Great. Thanks guys for the questions. I hope you’re doing well. So just want to talk about the guidance, not a huge surprise. I thought a lot of the factors that you called out Christian make sense. But maybe could you just break down the guidance assumptions, maybe like quantitatively, when you think about the macro factors, like China lock down, FX inflation, supply chain. Just want to understand how you’re thinking about that maybe in the near term here. And then also, maybe for Susan, like the product breakdown, you didn’t really quantify that instruments can end up pull through. How could that really trend in the second half of the year as well? Thanks.

Sure, Kyle. So I’m not going to break down the delta and guidance based on – I’m not going to try to ascribe a value specifically to each macroeconomic factor. But qualitatively, what we’re seeing is that the Americas is actually doing extremely well. But we did lose, in the first – if you look at back on the first half, the first part of the year we had COVID impacting consumable pull through, which we saw the numbers have been lower than what they’ve been historically. But overall the Americas has done extremely well and compensated and will continue to compensate, primarily for the weakness in Europe. That’s actually the area where we have the most – where we’ve had the most impact. And it’s a number of different things. It absolutely the currency headwind is significant we had – I believe over $0.5 million, like $0.5 million of currency impact in the quarter principally driven. And if you look at that on a year-over-year basis, principally driven from EMEA. We also have COVID still being an – having an impact in EMEA and the inflation/fears of recession/kind of the situation in Ukraine, all of those different factors are just slowing the purchasing process down. The good news is that, our demand and our funnel looks very encouraging. And so if you look at the balance of our written remarks on balance, all things considered the company is actually doing, I’m pretty happy with what the – how the company is doing. But I do think Europe is going to continue to be challenged for the rest of this year. And I think that’s really is the big driver of why we think we wanted to reduce the guidance going forward. China continues to be, I think, a bit choppy. I do think we saw – in the quarter, we saw some – at the end of the quarter, like, we expected to see some improvement in China. We talked about that on our last call, last quarter about the notion that we thought the lockdowns would maybe start to subsided in the Jewish timeframe. I think that’s true, but what we’re finding it is a bit lumpy. And I think that we – what’s interesting is the knock on effect of not being able to get into the labs. I talked about it in my written remarks, the whole concept of we had several instruments that we had shipped two customers in China at the end of Q1 that we just couldn’t install in Q2, because they were lock down. Now those instruments are now installed. People are starting to ramp back up a little bit. And so it’s I think back half is encouraging, but the balance of all these factors made it prudent for us to reduce our outlook for the rest of this year. Hopefully that helps Kyle?

Yes, I mean, that was a great, Christian. Susan, do you want – did you want to talk about like instruments first pull through maybe how that could trend? Or if not, it’s fine, we can just move on.

Oh, no. Happy to Kyle. I was trying to unmute. So just to give you an idea. So, we talked a lot about the fact that there’s a lot of enthusiasm by our customers in terms of our technology, which is great. Our pipelines continue to be strong. So because mostly because of the macroeconomic dynamics that we talked about, sales cycles have lengthened. Having said that some of the orders that we have forecasted in Q2 is pushing into Q3 for capital purchases. And then in Q3, you do have the government fiscal year end, which is going to help on the back end. So, we do see that interim placements in Q3, we expect to be sequentially higher in Q3, relative to Q2, you also have the fiscal year end associated with the calendar year end. And so we further believe that Q4 will be higher interim placements relative to what we had seen in Q2. So, you can model that out in terms of what it means for instrument revenue. Also based of a consumable shipments, especially for what we had seen in July. We’re off to a great start while I don’t believe that consumable pull through will return to the levels we saw in 2021. I do believe that the second half consultant pull through will be sequentially higher than what we had seen in the first half, just based off of how we’re tracking for the month of July, but again, probably lower than what you’re used to seeing at the end of 2021.

Okay. That was great. Thanks so much guys. And I guess, I guess Christian, I’m just thinking about like the issue that could be maybe internal or like specific to hack pie. You didn’t really mention anything there, which was obviously positive, but some of your peers in this sector have had some leadership changes on the commercial team in recent quarters, those have kind of peered to lead to in inconsistent execution in some cases, your execution’s been pretty good recent recently, but I’m just kind of wondering what gives you confidence that you can like basically smoothly transition with Jeff as the new Chief Commercial Officer. And is there any like structure or strategy change of the new kind of commercial leadership now that he’s been appoint appointed?

That’s a great question, Kyle. And I think the one reason why I have a lot of confidence is first, I know Jeff, and Mark knows Jeff, and we’ve worked with Jeff for a very long time. So, we know what kind of leader he is, and what kind of capabilities he brings to the table. And then on top of that, the other thing is that, I’m a former Chief Commercial Officer. Mark is a formal Chief Commercial Officer, and we’re still in, we’re about 800 people, but we’re not that big a company. We are intimately involved in all aspects of the business. And so I think we will be important to that transition in the sense that we have been – we were very closely tied to our prior CCO, and helping to manage the activities of the business and to the point of even negotiating larger deals and really being engaged with the team. But and so that will continue with Jeff. The other thing I would say is, Jeff also knows all of the general managers of the different regions since worked with the general managers in the different regions for many years as well. And so he comes in as a highly respected capable executive and he will come in and evaluate the organization as he sees it. And we may or may not make any changes. I really like the fact that we have created a scaled commercial organization that can operate all around the world. We talked about, sales in Korea. We talked about expansion in Japan. Our European businesses covered better than ever, although the performance isn’t quite what we wanted. And then in Americas, we’re growing at 50% and that’s because we have a highly capable team. And when you think about the backdrop of emerging competition, we’re extremely well positioned there because we have great products already. We have new products on the horizon. We have a team in place and when we launch products that we can launch immediately at scale. And I just think that gives us a significant leg up and Jeff as an executive is going to fit right in.

That was great. I almost forgot Christian, your background. So, he has two great sequencing CCOs to learn from that. That’s great. I’ll ask a final one here. Just kind of lumping two thoughts in at the end here. So the first being, you mentioned Christian, there’s a growing number of new sequencing entrances that pressured the America’s results, from what I understand, there’s no like pure-play long read companies that are going marketing time soon. Could you just talk about that a bit? Is that more on the short read side, I guess? And then secondly, ASP was obviously pretty high this quarter in the past public labs trade in programs, those dragged down ASP, what should we expect going forward, I guess?

Yes, those are good questions. I think that regardless of whether the entrance or long and short reads, the excitement about and buzz about the sequencing industry and space is encouraging everyone to stop and look at the totality of what problems they’re trying to solve, and how they –what technologies can help them solve them? And so I think the emerging entrance definitely create some conversations what’s so great is that we’ve been – we have what we believe is the best lottery platform in the market, and it’s the data’s becoming more and more clear every day that our short read technology that will bring to market next year have some serious advantages over these emerging competitors and the existing incumbent. And so we’ve – I’ve been in several sales discussions just this quarter already where we’re talking about – we’re talking about bundle sales. I want to buy the long read sequencer because I want to do a highly accurate whole genome sequencing. I want to buy the short read sequencer because it goes, I can look exquisitely deep with exquisite sensitivity, and therefore I can find the answers, the needles and the haystack. And I think that’s going to service, I do think that’s going to service really well. And going forward, we continue to have some trade-ins from Sequel I ones to Sequel IIs, which impact ASPs that’ll change in any given quarter. The APAC region’s been extremely successful with some promotional programs to make those conversions. And I think, EMEA and the U.S. and AMR are trying to emulate some of that. So there’d be probably some of that, but you’re right. ASPS in the quarter were generally pretty strong. And I think that has to do somewhat with product mix as well. We’re selling to commercial customers in some places, for example in AAB they typically have more capacity to buy the equipment and so that helps. So I think it’s the customer mix in any given quarter that will help or hurt the ASP. What’s really important is that we build the install base. And, as Susan pointed out, we have 460 units out there now, which is I think a real accomplishment in the short time that I’ve been the CEO and I’m looking forward to cracking through the 500 barrier soon. So hopefully that helps a little bit.

Yep. Perfect. Thanks Christian. Thanks Susan.

Thank you. The next question comes with Julia Quinn with JP Morgan, please go ahead.

Hi, thank you for taking a question. This is Amy calling on Julia. So I have a couple of questions. So the first one is related to the guidance. I want to go back to the China market. Do you guys have any idea, like what’s the outlook for the China market? Do you have any signs that when will the market be bounce back?

Well, Julia I don’t think we have a crystal ball and so therefore we’re taking more conservative views on China as I think folks on the phone know, we historically, China’s been a significant part of our revenues. As we grow globally, that we will be less reliant on China, but we do see lots of opportunity going forward in the second half of the year and into next year. But the timing of potential lockdowns and other fact – other macroeconomic factors, I think, we can’t predict that. And so we’ve taken a conservative view. We didn’t break out, we’re not giving guidance to high region. And so I don’t want to move down that pathway, but we have taken a pretty conservative view on China and APAC as a whole. As we said APAC as a whole though, is getting buoyed by improvements in Japan and the rest of APAC. And what’s so encouraging about that. If you look at the growth in the U.S., plus the growth outside of China you know, you’re really starting to see a step-up where as China improves, we can accelerate our revenue growth. And then if we can – if we can see Europe return to some sense of normalcy, then I think we’re really positioned well for long term growth. On top of that the product just keeps getting better. And I think the sequel to me platform, although it’s been around for quite a while. As I said, we’ve improved the output of that platform with our latest release by we’re seeing what 30% improvements in the actual output and throughput of the system. So customers are getting more value. They’re getting the methylation capability so for free with every single run, they get more data than ever before and more types of data that positions us very well against competitors and encourages others to get engaged with us on the long-read platform. So I think overall, the outlook looks really, I think strong for the company, but we do have to, we do have to recognize that we are in a pretty uncertain environment therefore. From a guidance perspective, we would rather be thoughtful and considerate of these headwinds. And as if we do a little bit better because the headwinds are less, then we’d be sure to tell you, but I think we’re trying to take a pretty conservative view on how we think about the world right now.

Okay. Yeah. That’s very helpful. Thank you very much. So my next question is relating to the pipeline. So first it’s for those new high-throughput platform so what kind of updates are we going to see and when, and how should we think about those updates? The second is with the short-read platform, the Omniome platform. So the specs looks very impressive, like I’m very impressed by the accuracy. So I’m just curious, like based on your initial market research or marketing intelligence, what’s the customer’s appetite to pay a premier for this higher accuracy in their day-to-day works? Thanks.

Yeah. Okay. Well maybe I’ll address the short-read platform first and then I’ll talk about the long-read platform. With respect to SVB, we were quite frankly enthusiastic about the response at AGBT and how customers really came up to us and really were excited about getting involved, getting into beta programs, seeing the data for themselves, because they see this as the next paradigm in short-read sequencing, the accuracy matters a lot. And the reality is that accuracy can actually make costs more effective because it’s not about the cost per gigabase, which is the traditional way in which sequencing companies have talked about the consumable cost. What’s your cost per gig? And the reason why they’ve had that is everyone’s accuracy kind of been in the same range. But if your accuracy is 15 fold better than the incumbents in the world, the discussion needs to turn to price per answer, because with higher accuracy, you need less coverage. With less coverage, you can you can turn a mid throughput sequencer into a higher throughput sequencer, and therefore you can operate at higher multiplex and lower price per answer. And I think that’s going to be an important message for us to drive as we get these products into the market. And so I’m really excited about that. I don’t – I, in other words, I don’t believe our pricing is going to be higher than others when you look at all the factors of getting to an answer, not just processing some sequencing. So if you move to the short read side and of course stay tuned because we’ll be getting into the beta phase of our development program in the next couple of months. And so I suspect we’ll likely have some updates at ASHG, which is…

Okay. Yes, that’s very helpful. Thank you very much.

Thank you. Your next question comes with Tejas Savant with Morgan Stanley. Please go ahead.

Hey guys. Good evening. Question, just following up on your remarks there on the product pipeline, obviously, it’s a point of investor focus here. I know you don’t want to commit to specific timelines just yet. But is there an interim instrument that you think needs to be launched before you get to that sub one K price point? Or do you feel confident just given what you said about your internal efforts that you can get there with next version of the Sequel?

Yes, I do think at a fundamental level to just that we have the technology now to deliver the $1,000 genome and without incremental steps. One of the strategies here of course is to develop a multi-product portfolio with long – on the long read platform side that offers customers much more flexibility than we have historically. So that, customers that are sensitive to – the capital cost offering a low capital cost offering with high value consumables. Customers that are doing extremely large cohorts, having the capability to run lots of samples with a reasonably sized lab under that $1,000 genome price point. And then that middle ground where you’re doing a diversity of applications, or you’re looking at lots of seeds, but you have high multiplex and you can use kind of that mid throughput system. That’s still fundamental to our strategy long term. And the good news is that we are thinking much more modular than we’ve ever thought about before. And I think that will give us a range of products and capabilities, and also improve lower the cost of the customer, but also improve the company’s ability to serve those customers and drive growth in gross margin, which ultimately drives us to cash flows.

Got it. Super helpful. And then one on the instrument and consumable side of things. On the instrument side, Susan, just a quick point of clarification that 3.7 million you mentioned, I think on Invitae, was that for instruments placed in this quarter, or was that sort of a payment for instruments in past quarters? And then on the consumable side of things, Christian to your point around highest throughput applications coming through as you launch the new version of the Sequel here. Do you expect sort of getting back to that 175K plus pull through range at perhaps the back half of 2023? Is that a reasonable assumption? Or do you think it’s really contingent on the new box being launched and getting some decent traction with customers?

Maybe I can take…

Yes, maybe, Susan, do you want…

Yes.

Yes.

Real quick, on the 3.7 million for Invitae that is because of a handful of Sequel IIe that Invitae purchased in Q2 that they took delivery in Q2.

Right. And then – and Tejas with respect to pull through expectations, it’s probably not appropriate for me to speculate on that yet, but you could imagine if we had platforms that had more, more throughput and you could do more runs per year, for example, or many more samples per year, that you would be able to drive the consumable pull through number up, but I’m not going to speculate as to the timing or the level yet, because I think it’s premature. And with the Sequel IIe if we get specific on the Sequel IIe, we’ve been running what 115, 1 – kind of in the low 115, 120 range. We are expecting to see that improve a little, particularly as some of the instruments that have shipped in the last six months finally start getting ramped up to speed. And some of our customers that have had significant staffing challenges are finally starting to resolve some of those. And so I think it’ll improve, but I think as Susan said, we don’t necessarily expect it to get back to the levels that was – that was out of Q4 and that’s partially because the mix of customers, we’re reaching more customers than ever before because of our commercial scale and not every customer is going to be running the se the sequencer 24 hours a day, seven days a week. And so it will – and as you tend to get to the – towards the end of a product cycle, you’re reaching – you’re reaching the lower edge of those customers so to speak that may not be high. They may need the technology and want to use the technology, but they may not be thinking of the same scale of projects. And so, I do think it’s going to be – I do think it’s likely to be better in the second half than the first half, but I don’t think it’s going to return to Q3, Q4 levels of last year, anytime soon.

Got it. Appreciate the color guys. Thank you.

Thank you. Your next question comes with Dan Brennan with Cowen. Please go ahead.

Great. Thank you. Thanks for taking the questions. I had one on Europe and China and then one on the pipeline, maybe Christian, just to start on Europe and China. So on Europe could you just unpack a little bit more of kind of what the issues are there? You kind of talked about staffing, competition, macro utilization and things like that, but could you just give us a sense of what were the kind of biggest issue if you will and I know you talked about the issues being transitory, but I believe you also talked about utilization being pressured for the year. And then the similar question on China as well. It sounded like you’re flagging mostly the inability to get into labs to do installations. So presumably this improved someone if you can give some flavor, maybe what the exit rate is and kind of how things have paced in July and then I have a follow up on the pipeline.

Yes, sure. So with respect to EMEA, when you look at – if you just kind of dive into Q2, we had several instruments, in the near-term funnel that where you were in, what we call our commit bucket that didn’t – that ultimately for whatever reason, the purchasing cycle got extended. And as a result, the revenue didn’t happen. The deal didn’t go away. But the deal didn’t get across the finish line in June. And so, that’s what we mean by extended purchasing cycles. And I do think that that was an impact in EMEA. Another impact in EMEA has been in some of our flagship accounts, they’ve had significant turnover and not – and as a result, haven’t been running the sequencers as much. And so, that affects the consumables. In other parts of both – on the continent and in the UK, we’ve had purchasing agents or tenders extend longer than we expected or purchasing folks just taking more time, because quite frankly, there is a lot of uncertainty with respect to their funding and the actual cost of the sequencer because of the FX changes. And they have moved lot in a very short window. And so those are the things that have impacted us in EMEA. And that’s why, when you look at those each individually – don’t give me significant concern that this is a systemic long-term problem, this is a problem, because of the environment we sit in. And we think that it will resolve itself. And in fact, the customer I was referring to with lots of turnover, they’ve actually started running their sequencers again in July. So we saw, and I said, in my general general comments, I’m not going to make, July specific comments about any particular region but…

Yes, they said, yes, no thanks Christian. That was helpful for sure. Maybe this one on the pipeline, obviously we’ll hear more about it next year. In terms of, getting below a $1000 on a long read genome how do we think about, as the pace of the price cuts on the short read side, continuum, we’ll see what happens this fall with Illumina. Like as that gap really widens, even though you’re going to shrink it again like, is the gap still going to be wide enough such that, that dilutes, maybe the uptake or the impact of say an $800 and $900 on long read genome?

I mean, we’ll have to see how the world unfolds, but I believe very strongly that it won’t. And the reason is today, not only is the price per genome, significantly different on our platform versus a short read platform, but also the throughput is a lot lower than, what you can do on a short read platform. So really it’s a combination of not just the pricing, but the throughput and, as we narrow the gap on both, I do think you see accelerated adoption because one, you can do the large projects using long read. Two, everyone is seeing now we talked about the Pangenome, the HPRC in my written remarks, the reality is that the reference genome now is changing such that, it will demonstrate that short reads are insufficient for whole genome sequencing. They just are. And I think that as we get the economics and throughput improve, it will completely change the paradigm. And on top of that, if we can continue to deliver epigenetic information telomere-to-telomere sequencing, with SNVs and Indels and all the structural variation at very highly accurate levels, why you would have to do multiple assays, which in the, even if the short read sequencer was charging a $100, let’s say for their sequence, you’d still have to run another sample prep to get, to get the epigenetic data, for example. And I’ll just it, the second you do that, you’re actually more expensive than what we’re talking about here is we kind of break through the $1000 genome barrier. And so for us, I’m very encouraged about the progress we’re making in R&D, about the state of the market and the state of the market being the proof points of why long reads matter. One of the core strategies that I had coming into the company was to, do enough collaborations, so that everyone could see the power of HiFi sequencing and the power of long reads versus short reads. I think all of those proof statements are becoming overwhelming, quite frankly. And now it comes, it’s incumbent for us to get the products to market that will enable, enable the scale and the economics that will, make a dent in that short read market, sort to speak.

Got it. Thanks Christian.

Yes.

This concludes our question-and-answer session. I would like now to turn the conference back over to Todd Friedman for any closing remarks. Please go ahead.

Thank you. As a reminder, replay of this call will be available in the Investors section of our website. Thank you all for joining us today. This now concludes our call and we look forward to updating you on our progress in the third quarter.

The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect. Have a great day.