Enovix Corporation (ENVX) Earnings Call Transcript & Summary

Hi, everyone. My name is Colin Rusch. I lead Oppenheimer's Sustainable Growth & Resource Optimization practice, including all the advanced battery technology. We're very pleased to be hosting the team from Enovix today: CEO, Raj Talluri; CFO Farhan Ahmad; and Head of IR, Robert Lahey. Raj, before we get started, I just want to give folks one quick logistical note, please email me any questions you have. We'll get through our list of questions. And then if you have any additional questions, those of you who are listening in, please just email me at [email protected], and I'll turn and weave it into the conversation here.

So with that, Raj, let's start with the question on everybody's mind. Why did you guys decide to raise capital when you did and in the structure that you did?

Yes, absolutely. I'll let Farhan take this one first, and then I'll add a little color. Go ahead, Farhan.

Perfect. Thanks, Colin. So the reason that we wanted to do the capital raise now was we were getting inquiries from customers, and Raj came to me and said, "Hey, we got a contract and we have customer. What if customers come and they want to build more capacity with us?" And I wanted to make sure that we have the balance sheet that can support that. People think you can go to the market at any time, but there are a lot of practical challenges. Most of the period, when I look at from now to April of next year, we can't go to market because there's only a very limited time window when the window is open for trading and you go into the holiday season at the end of the year. So we thought that this would be a good time, particularly given that we had hit 2 milestones, one with the fab to opening. And that, by the way, was very well received by customers. Before that, customers were working with us, and they would look at our battery and say, "Hey, this is very good technology, and we want to work with you guys." But there were some doubts in their mind, hey, can you manufacture these in millions of units? And after visiting the factory, I think we started getting much more serious requests from them, and maybe Raj can touch on this point after I finish. And so Raj was concerned that, hey, what if we have to order another line? And I wanted to be prepared that in case there is a demand upside, that we are ready to do. We looked at various options and convertibles and equity. And given everything that was there, high short interest and the practical challenges of doing convert, it made sense to just pursue equity at this time. We kept it small and limited amount of capital, not do like a big -- very big raise. So this strengthens the balance sheet, keeps us better prepared to address demand upside. And post election, we are also seeing some interest from customers that want to use our traditional Routejade cells more, and Raj can probably touch on that as well. So it just prepares us better to meet demand upside.

And so Raj, before you take over, let me just recap that, there's 2 things. You're getting deeper in with these customers and you want to have leverage in those negotiations, both from a pricing perspective as well as a capacity perspective so that there isn't a complex conversation.

That's correct, right? Like you don't want to end up in a place where you're qualified and you are negotiating on the price, and then you are also dependent on them to finance your line.

That's perfect. Raj, go for it.

Yes. Thank you all for listening and thank you, Colin, for hosting this. I mean, firstly, what my experience, I don't know, maybe 20-some years I'm doing smartphones, different things, is the different products in smartphones, is that the technology in smartphones when you introduce a discontinuity, I mean whether you talk about Wi-Fi first making the smartphones, Bluetooth making the smartphones, GPS making the smartphones because you wanted to do a navigation, dual cameras making the smartphones, fingerprint sensors making the smartphones. Almost any technology, LPDDR4, LPDDR5, I've been in this for many, many years. The way it happens is when you introduce a technology discontinuity that changes the user experience, typically it starts in the premium tier and very quickly goes into pretty much every single product because you don't find smartphones now that don't have Wi-Fi. You pretty much rarely see a smartphone that has -- doesn't have dual cameras. So it's a very competitive market and almost every customer wants to embrace a new technology very quickly not to be left behind. And for us, what we are doing is changing the game in smartphones with a silicon battery, 100 % silicon battery that gives much higher energy density. So I look at my past experience, and I feel like now we are at the edge cusp of it that we have customers really seriously constrain us, and we have some contracts with customers that asking us to be ready for production next year. And I was telling Farhan, look, my experience this starts, this starts really fast. So we have to be ready. And the lead time with our equipment, it takes time. So in fact, our customers right now in the factory, Ajay has just left hosting them and doing the tours. They want to see how the batteries are being made for launch next year. So at times like that, it's very important that we capitalize the company to be ready for it. And that was the single biggest reason. And again, logistically, as Farhan mentioned, we looked at all the possible dates and the timing was good. So this is a positive thing that we feel strong about our technology. And we also feel good enough about our manufacturing capability. The yields are there, the machines are working. And we've always mentioned that when we derisk, when we feel good, that we will get ready for [ higher ] volumes, and that was really the timing of it.

Excellent. So guys, let's unpack some of the details here. I appreciate the overview, so we can just kind of set the lay of the land. I know there's been a lot of folks asking about the YBS amendment and if it was related to the capital raise. If you guys can just walk through the specifics of that and what was driving that process and requirements around that.

Sure. Go ahead, Farhan.

Yes, I'll take them. So the YBS agreement is unrelated to the capital raise. We were funding the CapEx for the line ourselves from beginning of the year. And there are -- there was -- there's no change in our need for capital based on the change in the agreement. So let me just walk through what the agreement was and what it is going to be now. Previously, YBS would have funded the CapEx, but they needed us to provide collateral to the bank against which they would have done the loan, and that would have restricted our cash. So from a liquidity perspective, the YBS agreement is not really changing our liquidity. But in the old agreement, we would have to pay them a higher fee than what we are saying is a markup on the services that they are providing. They are like a contract manufacturer. So we were able to reduce the markup, and that is better terms for us. So overall, it's good for the company. And with the demand outlook that we have, it is a better arrangement that is there. And it was just that we were negotiating with them on exactly what the economics should be and that took us some time, and we just got it done. The other thing I should mention is that on the agreement that was there previously, there was a VIE treatment that -- because we would have required to put a collateral and YBS would have drawn the loan against that. That put us in something called a variable interest entity treatment for YBS. So that meant that any time I'm reporting my financials, I have to incorporate their results into ours. And that from a financial reporting is a very complicated thing. You think about as a CFO, you have to basically...

Yes. You don't want anything to do with that.

Yes. You're basically now signing off on financials that are coming from somebody that you can't really control, which is not a great place. So we wanted to get out of it, and that was one big reason we wanted to get out, and this new agreement allows us to get out of that VIE treatment.

Okay. That's perfect. So let's move on to just the technology, right? And that's the area that I think a lot of folks are going to be interested in now that we kind of have the foundational elements on the finance side. So what's giving you confidence in the tool qualification process and the Agility Line to give you confidence in potentially bringing an expansion at Fab-2? And I guess, my follow-up question here is like we really highlighted for investors that reaching nearly 80% yield at this stage of the ramp was a pretty important benchmark. So if you could talk about just some of those yields and what's giving you the confidence in the process so far, having gone through a pretty detailed evaluation of what you're doing with the Agility Line and the initial qualification on these tools.

Yes. absolutely. So what we -- what Ajay and the team really set up was to make sure that we did the FAT properly, we did the SAT properly so that when we first brought up the tools, the yields would start at where we left off in Fremont. And that is something I've mentioned, and we felt confident in our manufacturing process, confident enough that we said, "Hey, we don't want to spend any more money on Fremont," and that's when I decided to shut the factory in Fremont and move everything to Malaysia. Now on the Agility Line, which uses the same kernels as a high-volume manufacturing line, we were able to achieve the same materials we were cutting here and making batteries with -- in Fremont. We were able to get to close to 80% at Malaysia, a very short time, actually, a very short time, very impressive work. And that gave us the confidence now that we can go from there. And in my experience in semiconductors and other high-volume ramps, if you can start there, we have confidence and we can get to 90-plus percentage. That's what I've seen many, many times. And that is what we felt like another event where we felt confident in our machines and the way we were manufacturing that also that gave us like, okay, we're ready now.

And we talked about this a couple of weeks ago, but just the migration from 80% to that 90% plus, what does that entail? Like just so folks have an understanding of that. I would love to just hear from you because it seems like a lot of small improvements on existing performance that add up and compound each other.

Yes. It's -- again, I'll just step back a little bit and maybe for the viewers, don't worry about this like I do every day. The manufacturing process itself has multiple zones. There is a first part where we actually get the electrodes coated with the kind of material we want and they're in our Routejade facility in Korea, and we get them into Malaysia, where we cut them into really thin strips using lasers. And there, there is a certain amount of yield loss when you do that, whether the incoming material is exactly like how we wanted and so on. And so there's some amount of yield we lose there and which is fine-tuning of the laser to cut it precisely. Then when we cut them, we stack them into tall stacks like that. When you stack them, we have to make sure all the cathodes are lined up and anodes are lined up properly. Sometimes we lose some points because they're not exactly lined up, and there's some tuning to be done on the machine to line them up perfectly. There's a tool that measures how well they are lined up, and we need to adjust the software of the tool. Once we line them up, then we actually put the busbars through them and we put them in the mechanical constraint on it and we get into a nice, solid battery. There we lose a little bit because these are the machines we're adjusting. Then we have to put them inside a pouch, and we fill the electrolyte. I think there is some amount of -- did we fill the exact correct milligrams of electrolyte and so on, we need to adjust that. Then we do a pre-lithiation where we add more energy back. There the flag has to be perfectly placed. There is some adjustment need to be there. And then we test the batteries, then we let the battery form, then we go to final formation, then we check for all visual stuff, then we do X-ray. So there's an elaborate process. And everywhere, there's a little bit, a little bit, a little bit. But we know where we're losing. We have [ paradox ] of where the yields are going. And so we just keep grinding on them one at a time. It's very, very similar to what I've done in my past. This is how chips are made to. And the new process takes a few months to do it. Now the good news is, as I mentioned, our high-volume line ramp is with our cell phone customers is late next year, Q4 next year. So we have time, we have time from where we are to get it into the right yield so that when we ramp the production, it's a profitable business in terms of good margins. That's the key. You want to have good yields when you ramp the volume, that is actually the most important thing. So getting machines ahead of time and working on them step at a time to make sure they are good is a very good, very important thing.

Excellent. And I guess in that learning, you guys have started to talk about the ability to reduce CapEx by as much as 40% on the incremental line. So as you guys -- there's one thing to ramp this next lineup, but then there's another thing to redesign the tools or adjust the tools for a CapEx reduction. Can you give us just a little bit of perspective on what -- where those changes are? And I just want to remind everybody that, that would imply something on the order of a 6-month payback for each of these lines, which would drive an enormous amount of capital efficiency.

Yes. So good question, Colin. So what happened in the company is that we built a very small pilot line the company did first in Fremont to see how the battery can be made. Then we made slightly higher volume lines in Fremont, and we figured out how to make this. And the next iteration was the machines we built in Malaysia. So you can kind of think of it as we've taken a couple of shots at getting the system really right. As we built that, we also realize now that some of the processes we use may be more expensive than we would need to be, and we can optimize them much better. For example, the cutting of the electrodes, we can do them much quicker. There's new technology by which we can actually cost reduce there. The amount of pre-lithiation, there's something we can do there that will be different. The way we organize the line, so the line is not like a monolithic line that just does this. So we now think that we can have all the dicing of the electrodes as one step in one big form, and the formation is another big form and optimize in the middle. So like in any manufacturing process, as we build it once, we kind of find that each stage can be optimized. It's not like we're going to go completely redesign the entire 4 lines. We're going to introduce cost reduction efforts into different parts of the process in a very controlled manner so that we know we're taking the cost out. But at the same time, we are taking the yield and the throughput going. Super excited by that. Ajay and his team, he has an advanced manufacturing team that now that these machines are working have moved on to design the next stage of the machines. Next, traditional machines, if you will. And the technology changes. I mean there's better and better technology available. And the other thing we are finding now is that the new materials that are coming, new anodes and new cathodes and new kind of separators. And that also allow us to actually be more effective in the way we build our machines because some of them don't -- are not as hard to cut, come with more energy density and so on. So that's another advantage that we are seeing. So it's an optimization of a well-understood process stage at a time to take advantage of the cost reduction that the mechanical engineering team has come up with and also the material advancements are coming up. So super excited by that.

Yes. And one thing I would add...

Farhan, yes, I would love to hear about the capital efficiency part.

Yes. So the only thing I would add is that from the economics that we have described is approximately $150 million in revenue on EX-2M type cells for smartphones and at about 50% cash gross margin. So that would put -- the payback period is less than a year, not quite 6 months, but it's still very attractive returns. And the reason we believe that's possible is because it ultimately comes down to the product differentiation. The product that we are making is going to be on an energy density basis, very different and much higher than what's available in the market. And so that gives us the ability to charge a premium price. And if you look at it, the -- as a portion of the BOM cost for the smartphone, it's still fairly low. So we believe we can get it. And already, when you see it in the market, the batteries that are higher energy density are getting a premium. So that's on the pricing side, we expect to get a premium. And then on the cost side, we expect that as we increase volumes and once we get to 8 lines kind of scale, our costs will be significantly lower than what they are right now. And that kind of economics that comes with higher scale of manufacturing is a big part of driving the margins as well. So it's fairly attractive profile in terms of capital efficiency. And I mean this is something which is unique in manufacturing that we are -- the problem that we are solving is very unique. Businesses in manufacturing that tend to be good capital return are ones which are solving a hard problem. And I think we are solving a high-value problem that is also very difficult. It takes time. It has taken the company a long time. It started 17 years to get this far in the technology. It's not easy for somebody else to come up. So that's why we can get those kind of capital returns.

Excellent. I mean, guys, I have a handful of questions around customers, but let me just start with an initial open-ended one. You guys have been able to develop a level of customer intimacy that's pretty unusual and really necessary for a component company like this going into some of these phones. Can you talk a little bit about the process of getting into the process -- or into the -- under the covers with your customers to really understand the specs and the evolution of the end markets? And how much leverage you're getting out of that on the technology road map?

Yes. I mean, look, I think part of it comes from having long, deep relationships with these customers. I've spent many, many years, I mean, almost 2 decades working in smartphones. And most of the people I work with in smartphones over the years have moved into very senior positions at these customers and having a track record of delivering so many different technologies over my 2-decade career, from cameras to smart processors to Wi-Fi to memories and so on, gives us access to be able to have those conversations at the right level. And when we have the conversations at the right level, they can clearly see the technology is truly differentiated. And when they see that and when you have a track record of delivering that, you get access, right? And you get a chance, you get a shot. Now you only get a shot. I mean it's not like a guaranteed design. But when you get a shot, what happens is you're able to ask these questions of, listen, I have this technology. I like it to be in your smartphones or in your next-generation AR/VR devices. How do you guys test batteries? How do you guys use batteries? What shape could you use? And what you'll find actually is when you have access at the right level, customers are very willing to share those specs of how they do it because they want you to be successful because you're providing component that enables them to produce a great product. And when they produce a great product, people like you and I who are end customers have a great product in our hands. That is a part that people sometimes don't understand is that everyone wants great technology because they provide ultimately end user benefit. I mean I remember when I was at Micron, we were trying to break into Samsung, and I went and visited Samsung, and I asked the head of Samsung, "I'd like to sell you some NAND devices," and he was like, "Absolutely, Raj, you sold us Snapdragon," and then I asked, "Can I get a spec of how you qualify NAND?" And next thing, they send out a spec under NDA, I gave it to my team, and we have a great business there now. So many times, you actually find that just asking the question at the right level to the right people really, really helps because like I said, they want you to win because they can win if you win. So it's not -- and the interesting thing about that, Colin, is that it really helps the R&D teams know what to make. So now we have weekly calls with all the top customers at my R&D teams with their R&D teams. And in fact, like I said, some of the R&D guys are now in our factory now. So we get feedback on have we thought of this material? Have you changed this one? Oh by the way, don't worry about that test, that's not a real test. And like I'll give you an example, one of the things people like to do is take a phone and drop it many times and see does it withstand, does the battery break? Now typically, you don't get to do the test until much later because they have to put it in the actual phone. Our customers actually now give us a 3D model of the phone they'd like to put the battery in, and we build that model. We put the battery, and we test it ourselves. So that before we ever give the battery to them, we made sure it's safe. So that helps a lot, honestly. And I think that is the key to winning in these consumer markets is that close customer intimacy.

That's, I think, just really critical for us in terms of thinking of a long-term thesis around the company and a long-term investment horizon. So I appreciate that. Can you talk a little bit about specifics on the batteries? I mean, obviously, there's been a lot of discussion around milliamps and how many milliamps in the phone that you need. Operating voltage, there's some questions around that given the silicon anode. Can you just talk a little bit about what those specifics are that you guys are seeing right now and how we should think about that impacting some of the phone specs in terms of how they operate?

Yes, absolutely. I mean, look, I think the easiest way to think about it is the phone, if you look at these kind of phones, there -- now the shape and the size of the phone has kind of come to that place where it's hard to make it any bigger. Before, it doesn't fit in your pocket, it doesn't fit in your handbag. So which means that the space available for the battery is kind of almost getting to the point where it can't get much bigger. And that is just -- if you actually look at the last 20 years, batteries started getting bigger and bigger. Now we pretty much come to the stage, there's a certain space for the battery. And within that space, you need more milliamperes. And you need more milliamperes because the applications are demanding so much more. I think I showed some data that ChatGPT consumes more power than YouTube. I mean think about it. The display is on, video is on. It doesn't take as much power as a large language model running on the phone. So people want more milliamperes. And when you want more milliamperes the same space, it means you need more energy density. And that is what this company promises, to provide more energy density so that we can get more capacity in the same space. Now the trick is to be able to do that while keeping all the other things, which is charge very fast because people don't want to charge on the go, go to 800 cycles, 1,000 cycles so that you don't have to replace your battery every so often. Make sure that when you use the phone at very high temperatures or store it at high temperature in a place like India in the car or you sell it in, I don't know, Siberia in the cold, battery still has to work. And when things like 5G modem kicks in, the current draw is very different. So what we are now working on is while meeting the specs of fast charge, energy density increase and cycle life, we have to hit all the other temperature points. And of course, safety is number one. How do you drop them? And what kind of test do customers make? And that's evolution because one thing people don't realize about smartphones is most smartphones have what is called telemetry, which means when the phone is being used in the factory, it sends back the usage data to the OEMs so the OEMs going to know how the battery is being used in the field. And that they convert into test, which they share with us. So that's how we make the battery much better. So energy density, while meeting all these requirements, is what we are really working on. And you asked a question about the voltage. Silicon has a lot more energy when you go into lower voltage. So to get all the last part of the silicon energy, you got to go to 2.7 volts. And initially, when I first started a couple of years ago, that was a little bit of a problem because people used to tell me all the power management systems only work at 3 because that's where the graphite batteries work. But the work we've done with the ecosystem like people like Qualcomm and people like Samsung who makes their own processors and almost everybody that's in the phone space, they have now adapted the PMICs to actually the power management IC, the PMIC, I use the word, to be able to operate at different voltages to get the last ounce of juice out of silicon. Now this is not a very complex thing because if you look at the phone, there's so many components, there's Wi-Fi, there's Bluetooth, there's cameras. They all operate at different voltages. So there's a very complex power management system that when I was at Qualcomm, the teams used to build. So we were able to talk to them about adjusting the software so that they can now work with silicon batteries. And that's a testament to the ecosystem progress that silicon batteries are here to stay and it's making our life much simpler.

Yes. I guess there's a follow-up question there for me that's kind of twofold. I guess how quickly are the specs changing for those processors? And can you speak to just the wider range of operating voltages? I think you already answered this question, just where silicon operates best in the heterogeneous kind of evolution of the power environment within the phones changing. It sounds like the industry is caught up with kind of optimizing around silicon anodes as a technology node that is going to enable the next layer of growth for the phones. Is that fair to say? And how quickly is that changing?

Yes. I mean, I think once you make it, the changes in the system and then it comes with all the future devices. So I think that -- I feel like that chasm we have crossed. I think the part that we continue to optimize now, Colin, is the understanding the use cases of various markets. So for example, when the 5G modem is on, it draws a current certain way. When the phone is on standby, it draws at a different rate. When you go into something like an AR/VR headset, there's no standby mode. It's on all the time. So the discharge rate is a little different. So we have to adjust to that. So it's really the specifics of the use cases of end devices, whether it's a AR/VR device, whether it's a smartphone, whether it's a PC, whether it's a headset, whether it's a watch, there is nuances to how the user uses those devices that actually have impact on how the battery discharges and the current is drawn. So we are optimizing to those now. And those are typically software optimizations on the process and the PMIC side. But for us, we need to test to make sure that it works in those conditions, right? And that is the journey we are on now. And it's fantastic to see that. And we have customers helping us with that. That's why I feel like we are increasing our lead over our competition in terms of how to build these batteries that are more ideally suited to the various applications with the help of our lead customers. And that is how you build sustainable differentiation.

That's super helpful. So can you talk a little bit about that technology road map that you guys are on? You talked about the EX-2M, alluded to an EX-3M. Can you talk about what areas you're focusing on within that road map to evolve the performance of the batteries?

Yes. We have quite a long way to go in my mind. As I mentioned, silicon takes a lot more lithium, can hold a lot more lithium than graphite. We haven't fully exploited that advantage yet because the first time we're making it into high-volume production. Now we are finding that the next-generation cathodes are coming that actually work at a higher voltage. Now when the cathode works at higher voltage, you get just a lot more energy out of that part of it. So we take advantage of that. We're getting next-generation silicon anodes that actually have different kind of doping. So silicon oxide is what we used to use. Now there's silicon carbon. And within silicon carbon, there's multiple flavors of that. Now we are able to take advantage of that, and that gives us more energy density. We are finding the separators that are much thinner but still very safe that reduces the amount of inactive material inside a battery. I mean the trick to getting higher energy density in the battery is to have an anode that can hold more, have a cathode that can run on higher voltage, but reduce inactive materials, right? So for example, the constraints that we hold that hold the battery down. We are trying new materials that can hold it down but not take as much space. We're looking at a different way of packaging inside so we can reduce inactive materials even more. So there's a long ways to go. We have a few of them now identified as what we call current plan of record for EX-3M, and we have a team working on that. And we have an R&D team in India now that can work ahead of us. So -- and there's electrolytes. I haven't even talked about electrolytes. Electrolyte changes actually helped that. So there's quite a bit of work, and I'm pretty optimistic that we can continue on this technology road map and get higher and higher energy density batteries to our customers. And we feel pretty good now with the great work Farhan and the team have done on the balance sheet side and the work Ajay has done on manufacturing side and my sales and marketing team has done on the customer side. We feel like we're situated in a good space to really get this done now.

Excellent. So I just have 2 more questions for you. First on the supply chain side. Like if the foundation is really set for the organization to really start ramping and delivering on this, can you talk about the preparedness of the supply chain to support you and maturing of those relationships?

Yes. I mean we don't take a lot of material. That is actually the good part. And we do have now multiple vendors to most key components that we use. So I feel like the supply chain on the material side is very strong, and we feel good about that. And the fact that we make our own electrodes has been a really big, big plus for us because we are now not totally -- not dependent on someone else making electrodes for us. We buy the powders, if you will, and coat them ourselves. That part is very good. We have now established relationships with a number of machine vendors who make our machines. And now we have more coming for the next-generation machines. So I feel like -- I mean, we have our supply chain team that Ajay has built that has done well. We have some of them in Malaysia and in Asia helping us with that. We recently added some people in China also to our team. So we have a supply chain team there. So it's -- I feel pretty good about it. Now right now, our volumes are still low and they move up slowly and the EVs take so much material that we can take advantage of the work that's been done with supply chain and the EV that we can stay on the coattails of that and get there.

Excellent. And last one for me. I can't let the election go just yet. So I just want to talk a little bit about tariffs and how you guys manage that. Obviously, you're going to have customers all over the world. But just want to understand kind of what your tariff exposure potentially is around imports into the U.S. and how that might impact some of your customers as they think about shipping product into the U.S. I know it's early days, but any thoughts on that are more than appreciated.

You want to take that?

Yes, I'll take that. So there are two sides of the company. One is the Enovix core, which is doing manufacturing in Malaysia and the other is Routejade, which is in Korea and which is already shipping a lot of batteries. Both Malaysia and Korea are not on the tariff list that I'm aware of. And that does position us well. There are a lot of companies that would want to diversify away from China, in U.S. And for them, we are alternate source. We can have a supply chain that is based in Korea, and we can serve those needs. And we are already seeing some interest from customers that want to move their supply chain. And that currently can't -- are finding that they can't have their future plans reliant on China, and they're coming to us and saying, "Hey, can you help us?" And the stronger balance sheet actually helps even on that side. And there is a team we are looking at inside the company, which is focused on how to grow the business and take advantage of these new tariffs that could potentially happen. And Routejade is a great position -- puts us in a great position today. And for Enovix also, it does position us to be in a unique situation where our primary competitor, ATL, which is shipping batteries today is based in China and does all their manufacturing in China. So I think from that perspective, we are very well positioned. And because our manufacturing is in Korea and Malaysia, not really impacted by tariff.

Excellent, guys. Any last thoughts you want to share before we wrap up? Really appreciate your time and invite any investors who are listening to this to reach out to us with any follow-up questions, we're happy to chase down what we know as well as get the company online if need be. But any -- as we wrap up here guys, anything that you'd like to leave folks with?

Yes. I mean, I'll just say a quick thing, and I'll see if Farhan wants to add something. But I think -- thank you for the questions on both the capital raise and the YBS stuff. I'm glad we were able to clear that confusion. The capital raise was really an indication of the confidence we feel in the company and the customer pool. And I mean I think Farhan did a great job with his team on renegotiating of YBS. It's just a net positive for the company, and it's some really good work by the team, by the way. So I think they are unrelated events, but both very positive.

Excellent, guys. Well, listen, thanks so much for the time early this morning on the West Coast, and we look forward to talking with you soon. And again, everybody online, happy to chat as you have questions around the story. Thanks so much.

Thank you, guys. Bye-bye.

Thank you. Thank you.