Fabrinet ($FN)

Good morning. Thank you, everyone, for coming. I'm Samik Chatterjee. I cover the hardware and networking companies at JPMorgan, and I have the pleasure of hosting the next fireside chat here with Fabrinet. Seamus Grady, CEO; Csaba Sverha, CFO.

Good morning, everyone.

Thank you both for coming to the conference.

Thank you, Samik.

So let's kick it off. Seamus, for you. I think just overall, given the amount of interest we're seeing from investors, maybe I'll ask you to outline a bit more about Fabrinet in the supply chain, and I know it's more one-on-one question to start with, but let's do that and then we'll move into deeper questions here. How would you outline to invest Fabrinet in the supply chain? And why the role expands as you look at the future in terms of what Fabrinet's role is in the supply chain, how does that expand? How -- why does it expand as well?

Thanks, Samik. I think our roles of Fabrinet, we're a contract manufacturer. We make other people's products. We don't have any products of our own, and we're -- I would call it as a pure-play contract manufacturer. Again, we don't have our own products. We help our customers in a number of ways. First of all, the background of the company was -- the company was established originally in 2000 and then went public in 2010. And was established as a contract manufacturer specializing in the then fledgling optical communications industry. So 26 years ago, the company was founded by a gentleman called Tom Mitchell. Really, we specialized in optical communications contract manufacturing from the very start and built up expertise that came originally from the disk drive industry. Actually, a lot of the expertise came from the disk drive industry. We're headquartered in Thailand, and that's where most of our manufacturing footprint is. And we've really built up a lot of expertise in putting these products together right down at the -- from the wafer level all the way up through finished systems. We do a lot of packaging work at the wafer level. We make components and subassemblies and subsystems, and we also make finished products for most of our customers. Our customers range from companies like NVIDIA, Cisco, Coherent, Nokia, Ciena, several of the leading companies in the world. Our role really is to provide leading-edge manufacturing capabilities for our customers to be a trusted partner for them and to do it in a way that allows them to realize some hopefully significant savings if we do our job well. So we're -- I would call it as a very high capability, high technology manufacturer, but we keep our costs in a very tight control because at the end of the day, if we can't produce the product at a better cost and the customer can produce it themselves or that our competitors can, then there is much reason to go with this. So our role has evolved over the years. We've gone from being more of a specialist component country manufacturer to -- we still are that, but we also do a lot of complete system assembly as well. So full suite of products and services. A lot of the work we do is at the packaging level. Approximately 70% of our manufacturing space is clean room space, which is quite unusual for country manufacturer. We're also expanding quite significantly over the last 10 or so years. Up to 2025, we grew our compound annual growth rate of 16%. In FY '25, we grew 19%. And then we're in FY '26, we're in Q4 of FY '26, at the midpoint of our Q4 guidance, that would put us at a growth rate of 34% for this year. So our growth rate is actually expanding, it's increasing actually over the last couple of years.

Okay. So we'll get to the growth rates in a bit. From our perspective, Fabrinet was very focused on the optical contract manufacturing market. Now you broaden that out to participate in the broader HPC market as well. When you reflect on that shift, what drove you to take the company beyond Optics, which is where you are well known for your specialized in? And how do we think about -- are there more adjacent markets that you see opportunities in beyond even HPC for Fabrinet...

Yes. We're really looking to -- we're a specialist, and we want to always remain a specialist. We think the counter manufacturing industry has been, I would say, somewhat obsessed with diversification for a long time. And if you get too diversified, you end up in 10 different industry segments and you end up being an expert at none of them. So we're very much focused on being a real expert in the contract manufacturing space. High-performance compute makes sense for us for a number of reasons. One is a practical one. We signed a warrant with AW with Amazon with AWS a couple of years ago. And the first foray into that business for us was they asked us to produce a range of their high-performance compute PCBAs. So it's a good fit for us. They are very complex PCBAs, very difficult to produce, and we've done a good job for them. Secondly, we believe high-performance compute is a good fit generally because over time, photonics and optics will become more pervasive in high-performance compute. A lot of the high-performance compute bottlenecks are no longer the compute power themselves, it's more of the ability to move the huge workloads around, which is where you need optics and photonics. So it's a good fit for us. We've also started to -- it's early days, but we've started to produce transceiver for AWS as well. So there's a good fit there between high-performance compute and our photonics and optics capabilities that we think will serve us well in the future. And we think there's other high-performance compute customers who could use our services as well. So we'll be working on that.

Got it. Got it. So maybe going back to the growth rates. In the past, you've referenced long-term growth rate for Fabrinet 2x the optical industry and 3x the contract manufacturing industry. So now your growth rates are accelerating, as you just pointed out. Is that excluding because the underlying market is accelerating? Or are these more a function of your outperformance not staying at that 2x, 3x anymore because of these moves to the adjacent markets that you are now referencing?

Yes, I think it's both. I think the services we provide customers appreciate what we can do. We're a little bit different to most contract manufacturers in the sense that we try to do as much as possible down the stack and at the wafer and packaging level. We don't make the wafer, but everything after the wafer is in scope for us, including packaging and making the components that go into the product and then assembling the next level up in the system all the way up to complete systems. I think we've always had very good kind of depth in the services we provide. We've also -- the breadth has increased over the years. So I think that has been a factor. But then, of course, the industries we serve have just been expanding very rapidly over the last few years. . The best way to -- the best strategy to increase your revenue is execution, and we have a very good reputation with our customers for being a very reliable partner for them and doing a very good job for them. So I think it's a combination of our -- the breadth of what we're doing for our customers is expanding. The execution with our customers is very good. We do a good job for our customers and they appreciate us. And of course, we're very fortunate to have really the cream of crop in terms of the customers we have their business is exploding right now. We're right there with them to help them. So it's a combination of all of those factors.

Okay. Okay. Recently, you announced that you're acquiring additional land in Thailand, I think is pronounced and you continue to expand the real estate as well. Can you now discuss the strategic rationale to acquire in Nava and beyond the cost -- the low-cost location that you have in Thailand, what otherwise makes Thailand the best suited to -- for you to continue to expand in that geography?

We have two main campuses in Thailand. The original campus is in Pinehurst, which is closer to Bangkok. We have a significant footprint there. But we're essentially landlocked in Pinehurst. We've converted over all of the nonmanufacturing space that we could -- we've converted over to manufacturing space, and we're in the process of converting about 150,000 square feet right now in Pinehurst into manufacturing space. And then that's it, we're kind of maxed out in terms of manufacturing capacity on that campus. . The campus and question that you mentioned or the location in question, it's in Nevada corn also known as Nava. It's about 15 minutes from our Pinehurst campus. So it's a very good campus -- it has a factory on the campus and room to build another 1 that if we were to build out everything on that piece of land, it will give us additional capacity for about another $500 million of revenue. Right now, our revenue -- let's say, our revenue capacity before that campus is about approximately $5.5 billion. So that would take us to about $6 billion. We're also building at our second campus in Chonburi, we have a building in construction right now, building 10, which when it's finished, will be about 2 million square feet with additional capacity for about another at $3 billion, that would take our capacity to $9 billion. And then we have enough land again in Chonburi to build another 2 factories, each of which would add about $1.5 billion of revenue capacity. So right now, we have land capacity, let's say, for about $12 billion of revenue. We are growing fairly quickly. We -- the Building 10 that I talked about, it will be fully completed by the end of the year, but we'll actually be occupying two floors of that building, one in July and another in October to make sure we can accommodate our customers' needs. So lots of room to grow. Thailand as a location, it's a really excellent location. We have found to do business, availability of really excellent people who were able to train and retain, it's -- the cost is predictable in Thailand. It's a friendly place to do business, a good location to do business. The government there are business-friendly. So we found it really to be an excellent place to do business, and we plan to continue to grow and expand there for many years to come.

Got it. So you mentioned you'll have capacity up to $12 billion, you've also referenced $8.5 billion on the earnings call that you'll have revenue capacity for. Help us think about time lines? Like what does it typically take from the time that you start putting sort of brick-and-mortar place to filling up that capacity. When you're outlining $8.5 billion and then $12 billion of capacity, what should investors think about, okay, this is probably a good way to think about how you filled up capacity that you rolled out in the past?

Yes. I mean if you go back to the first factory we built on the Chonburi campus, which is all the way back in 2017, and I remember at the time, it was 550,000 square feet. And I remember thinking is going to take us a long time to fill that factory and we fill it very quickly. Then we built the next factory, which is called Building 9. That was 1 million square feet. And again, we filled that within relatively short period of time, 2 or 3 years to get that filled. And then building 10, again, 2 million square feet, $3 billion of capacity. It will take us a couple of years to get that filled up. We guide one quarter at a time. We don't guide -- we don't give long-term guidance. It's very difficult to give long-term guidance in our business. But I think the fact that we're building, building 10, we're taking over, if you like, 2/5 -- two of the five floors ahead of the completion of the full building kind of gives an indication that we're quite optimistic about our ability to fill up that footprint. Plus, we have the plans already ready to go for building 11 and building 12. So we think we have a good runway for the next several years, but we are looking for more land as well in the Chonburi area to continue to expand. Because once we finish, like I said, building 10, 11 and 12 then we don't have any more land on that campus. So I think at the time when we started there in 2017, we thought building 12 it lasts for a very, very long time, but here we are coming up on 10 years later, and we need more land. So we'll be looking to continue to expand.

Okay. Okay. And maybe let's talk to the flip side of this. As you ramp capacity, how do we think about gross margin headwinds you've been seeing some already from a ramp cost perspective. But clearly, you're laying out your multiyear road map of continuing to add capacity. How does it play out on your gross margin line?

Yes. Our -- we have some gross margin headwinds as you ramp new products. We have many new products ramping at the moment. We have a number of new products with Ciena and Cisco. We also have the high-performance compute business ramping for -- we have a number of new transceiver programs that are -- all of which are ramping. It's all good news. They are all products that are ramping that once they're ramped, we benefit from that, but they do create a little bit of gross margin headwind as they're ramping notwithstanding that and maybe also notwithstanding any FX variations. Our gross margin has been in the, I would say, 12.5% to 13% range are maybe more importantly, is tiny. As a country manufacturer, you have to keep your OpEx under very tight control. Our OpEx right now is about 1.4% -- 100% revenue basis. And really, as we grow the company, we don't need to add a lot of additional OpEx. So there's probably a little bit more leverage on operating margin than gross margin. But we do plan to continue to nudge the gross margin up over time. We're -- again, we're a service company, we're a contract manufacturer. So we're not a product company. We can't just increase prices just because there's a lot of demand out there. And there is a lot of demand out there. I've certainly never seen anything like it. But we'd be careful. We can't just increase prices just because we can. We won't do that. We value the relationships with the customers very much. And if anything, we'll be using this growth to make sure we stay very competitive for our customers and where we can, we'll actually bring prices down as we're able to bring the cost down, we'll be using it to actually grow the business. So a little bit of margin expansion, but it will be gradual and over time rather than any big step-up in margin.

Csaba, just checking, do you have anything on the gross margin?

No, I think one thing that is important to mention is we are building out this capacity, our fixed cost structure remains very, very small. So our fixed cost is about 5% of revenue. So if anything, where the growth would pause, we have very intact gross margin structure and profile. So in that sense, there is not a of leverage under top line growth at the gross margin level. But on the other hand, we are protected on the downside as well. So I think we are in a fortunate position in terms of

One of the questions I get often is, clearly, Fabrinet is known as the Delrin optical contract manufacturing day. And you've talked often when we've discussed about clean room being a key differentiator. But what does it take for new competitors to come in into the space and sort of a catch up to you in terms of what capabilities -- and are you seeing any competitive threats emerge, particularly as demand becomes more significant, are customers looking for additional suppliers and are you seeing sort of new supplies being helped on that front by the customers itself?

I think what we're seeing with the customers is the customers are asking us to do more. So more at the packaging level and at the component level and at the subassembly level and, of course, at the complete system level. What would it take for a competitor to get into the business and successfully compete with us. It's easy. You just need about 20 years and a lot of experience along the way. We're -- we've been doing this for a very long time. And because it's all we do -- we've become quite good at this. But there's really nothing to stop. I think what makes it difficult maybe for a competitor to compete with us is the sheer number of process steps that we do for the customer. We don't just assemble -- if you take transceivers or if you take the DCI business as a good example. We don't just assemble pluggable transceivers. We make, in many cases, a lot of the components second into those products. In some cases, we make up to 60%, 70% of the bill of material in-house. So that allows us to be very competitive for the customer, but also it creates a lot of stickiness with the customer. The customers trust us -- they know we'll never compete with them. We never have our own products. They know we won't let them down and they know we keep our costs under very tight control. So it's kind of a winning formula. Some of the things we have seen some of our competitors do is to maybe get into the product business and become more ODM like than country manufacturers. That's their choice. That's something that some manufacturers have started to do. That's their choice. But certainly, we've tended to benefit from that because when the contract manufacturer becomes a product company, typically, a customer somewhere gets upset. So we've tended to benefit from that. So really, there's always competition. I mean everybody wants our business, everybody is after our business. We're accustomed to that. But we're confident we can continue to stay ahead of the competition and really make sure we continue to kind of invest in the technologies of the future and the customers of the future.

Got it. So given that we're on that topic about investing for the future, how is the investment in rate extending capabilities in packaging, just help us understand the opportunity you're seeing there? And maybe any other areas that you feel like you should focus your investments and as you prepare for next generation.

Yes. So we have not been very acquisitive. If you look over the history of the company, we have not grown -- we've grown the company. Like I said, we've grown compound annual growth rate last year, 19% this year to be about 34%. So we've grown very nicely without any acquisitions to speak of. There was a small acquisition in, I think, 2016, it predates me, but it was very small. There was not so -- there's been no acquisitions in the last 9 years, it's all been organic growth. We're not against acquisitions, but we typically try to focus on growing the company organically, we think is a good approach. It works very well for us. And then we will do acquisitions or investments if there's a particular capability or technology that we don't have that we feel we need to have. And that's really the category that this rate investment falls into -- it gives us access to for co-packaged optics and also for silicon photonics. It gives us access to some wafer level packaging processes that we don't have ourselves. We don't have them in-house. We don't have that capability in-house. We use -- we've been using Raytec as a supplier. They're a very good company, a very capable company, and we really like how they operate it seem to make sense for us when the opportunity came up to invest in them, it made sense for us. We invested, I think, $32 million for about 14% of the company. And it gives us access, like I said, to a number of wafer-level packaging processes, including copper pillar bumping and a few other processes that we want to have access to. With that investment, -- we also -- we haven't announced it previously, but Raytec will be establishing a manufacturing footprint on our campus in Thailand in the coming quarters. So we're pretty excited about that access to that technology and capability, and it will be on our campus. Raytec then, of course, get access to our customer base. So it's a kind of a symbiotic winning relationship that we're pretty excited about. As for other technologies, again, as we go through all of the new products that we're working on, if something comes up that we -- usually we developed the capability in-house. But if we find something that we don't either want to develop in-house or we feel we're not able to develop it in-house, we would be open to making further investments. But we're not too keen on investing, let's say, and acquiring just to grow the top line. We don't feel the need to do that. We think we can continue to grow at a nice pace just by organic growth and continuing to expand the relationships with our customers.

Okay. And ask you the next question. But just before that, it heads up to the audience. If you have a question, you can raise your hand and we'll get a mic over to you. So while we're waiting for that, you announced the transverse programs, including you said AWS. Can you help us understand the customer -- what drove the customer's decision to outsource the program or engage fab on the manufacturing side?

Yes. I think we have a number of wins that we've announced. -- here's-- -- in most cases, what drives the customer to come to us is our ability again to make -- to do a lot of the subcomponents that go into these products. and then to produce -- we've produced, I would say, north of 50 million transceivers over the years, well north of 50 million transceivers. So we have a lot of expertise, a lot of capability. We're very good at producing transceivers in volume at scale with very high yields and very predictable costs. So we're very good at this. In the case of these recent wins, they really fall into kind of 2 categories. One is for a hyperscaler. You mentioned AWS where we'll be producing a product, a couple of products for them. They're not our designs. Again, we don't have our own designs, so we're a contract manufacturer. -- we'll be producing for AWS -- and then secondly, some merchant transceiver business. One is an existing customer -- sorry, they're both existing customers. One is a transceiver customer of ours. The other is more of a traditional telecom customer who is now getting into the datacom world. So we're excited about both of those. We haven't sized the opportunities, but they're both significant. And certainly, the combination of the two could be as big as our existing business with our main customer, NVIDIA. But in fact, either one of them could be as big as that. So they're very significant, but it's early days. We'll ramp those over the next 12 to 18 months, but they are both significant wins for us. We're very excited about...

Okay. Great. Let me just pause you and see if there's any questions in the audience. Any questions?

When you look at your customer base, you mentioned NVIDIA being core. You look at the stack of different technologies, whether at the data center, the individual management factor with the component guys momentum coherent or their subs going down to Dexcereals, -- where do you see your space, you mentioned NVIDIA's core, but do you move all the way up and down as contract through the entire spectrum? If you could give us a little bit more color in that?

Yes, we do. I mean, historically, we've been -- originally, we were a component manufacturer, but we've been moving both down the stack and up. So down, I think everything -- we're not going to get into the wafer we're not going to be competing with TSMC or anything like that. But everything after the wafer has been produced really is in scope for us. We're able to do a huge amount of packaging -- and interestingly, we don't do packaging as a stand-alone service. We do it as part of a broader service for our customers, where we're taking the wafer, singulating the dies and packaging the component as long as we're then using that component. We don't have actually any third-party revenue for packaging. It's -- we do it for our customers, where we're then using the component in the next level up, if you like, in the assembly. So really everything right down to the wafer level packaging, all the way up through components and subsystems, pluggable devices all the way up through complete network systems and everything in between. It's all in scope for us -- but we like to develop the capabilities in a really kind of a deep way. We -- getting into any of these businesses, we don't want to get into those businesses unless we can be really excellent at it and provide a great service for the customer. we've managed to expand it over the last several years. We're certainly doing a lot more now than we were 7, 8 years ago, and that really has contributed to our growth over the years. So what it also does is it allows us to be very competitive for the customers. we're able to provide breadth of services that really no other contract manufacturer can. Our margin is significantly higher than other contract manufacturers -- and 1 of the reasons for that is we're able to offer a very compelling -- a very compelling business case for the customer by having us do more, we can save them more, in many cases, by eliminating 3 or 4 other margin stacks that Megan, we can help the customer be much more cost competitive. So it improves the stickiness of the business. It increases the revenue and the margin opportunity, and it also saves the customer a lot of money. So it's a very compelling proposition.

Maybe I understand you can't give not a lot of visibility short term, but you also do long-range planning, right, capital outlays for your construction of the business, there's a huge gap between no visibility short term than some long it. Can you maybe just give us a little more detail on what goes into your LRP for capital allocation that you don't have short term and just to sort of push pull? And then can you sort of transform your business given what's going on more or anything else to have a little bit more -- you mentioned stickiness. So that's a component of visibility. So maybe just close that gap for us a little bit.

Yes, sure. So we -- as you said, we guide 1 quarter at a time -- but of course, we have to plan much longer than that. I think one of the interesting phenomena that we see going on. Historically, any contract manufacturer will tell you one of the struggles they always have is to get long-term forecast from customers. Customers generally don't like to give very long-term forecasts. And usually, they'll -- where they can, they limited to whatever is in the contract. Maybe a little bit longer for the purpose of planning long lead time components. But these are not normal times. And what we're seeing right now is most of our large customers are happy to give us 2 years and maybe even up to 3 years of visibility. That doesn't mean that they're making a purchase commitment, but they're at least telling us, okay, for the products we're making, here's the road map that they see in terms of the products that we're making, the new products coming down the track and also the volume, and therefore, the likely manufacturing capacity that they need from us. So the customers are willingly sharing like I say, 2 or 3 years of visibility, which allows us to make these large capital allocation decisions. In our case, we have to build out capacity to support the customer. Armed with that knowledge, then it's a relatively straightforward capital allocation decision for us. So what I mean by that is if you take building 10 as an example, it's 2 million square feet, it takes about 18 months to construct, the CapEx is about $130 million to $133 million, depending on the FX. At full run rate, the building will generate about 40% ROIC -- so it's a really good use of the company's capital. At full run rate, about 5 months' worth of operating profit pays for the entire building. So it's a really excellent use of the company's cash -- but on the downside, if something were to happen that the world economy were to collapse and AI were to disappear, the gross margin headwind on -- for Building 10, even if I were to sit idle, is about 15 basis points. So a tiny downside risk versus a very significant upside opportunity. And we work very hard to make sure we kind of set ourselves up for that kind of success where we capitalize on the upside but largely insulate ourselves from the downside. And it's that customer visibility that we're seeing that's giving us the confidence to continue to grow and invest the business, again, in a way we capitalize on the upside, but we are risk-averse. We don't like to take big risks with the company's capital. So we'll be making sure we protect ourselves on the downside.

So maybe moving on. let's talk about supply constraints at. We can see that the -- there's industry supply constraints within the optical industry. Maybe talk about where are you seeing the bigger impact relative to your portfolio -- and should we view these, given the demand growth we are seeing, should we think about supply constraints now being structural for the industry? Or do you think it's more transient?

I think it's -- ultimately, I think it's more transient, but how more transient but how transient remains to be seen. I think it's really a function of -- some of the component supply pipelines take a very long time to build out, if you take a foundry for a laser. It takes a long time to get and running and to get the yield to the right level and to get the open to the right level. And really, what we're seeing is the demand has accelerated at a much faster pace than the has been able to keep up. So there are some pinch points, I would say, particularly around laser supply, specifically EMLs. But I don't believe it will be a long-term problem. I think it will get resolved. So that will be probably the biggest 1 we're seeing. There's always other more short-term supply constraints to pop up, especially when you're dealing with significant volume increases like we're seeing. But that 1 in particular, I think, like I say, I think it's a transient one, but it will take a little bit of time for the industry to catch up.

Okay. Okay. It's almost been a year since you entered into the AWS partnership and had the issuance of warrants. Are you seeing any other hyperscalers or any other customers looking for similar agreements in terms of trying get visibility into capacity on their own by engaging with you on that front?

So we're -- I mean, we're talking to several other companies, I would say. I don't think the hyperscalers necessarily look at each other to determine their strategy, they each kind of do their own thing. Our relationship with, I would say, all of the hyperscalers is very good. We know them quite well. Interestingly, predominantly because of our strength in our DCI business. Most of our DCI, data center interconnect customers they're shipping those products, 400 -- 800 products to the hyperscalers. So the hyperscalers are in our factories all the time auditing the production lines that we're using for our customers. So they know us very well. They know what we can do and they have a good -- I think a good impression and a good feeling for the capabilities that we have. So that has been a real kind of a catalyst for us to allow us to really start a more meaningful dialogue with some of the hypers -- but any of these relationships take a long time to develop in our business, it's not unusual for when you engage with a willing customer until you're actually shipping something, it can be 18 months to 2 years. There's a long kind of gestation period from engagement until your shipping revenue. So yes, we are talking to a few of them, and we'd be hopeful we can work with more hyperscalers directly. Again, where it's appropriate because, in many cases, not -- like I said, we never produce our own products. We never have products that we'll be competing with our customers. But where the hyperscalers need someone to produce products for them with a direct contract manufacturer relationship. We think we can do...

Part of the discussion with investors on the optical front is on OCS products at this point. How are you thinking about the opportunity? What are the breadth of engagements do you have with customers on that product? And how should we think about once those engagements turn into wins, how soon can we see revenues relative to...

I think for us, OCS, we're not really going to opine on whether OCS is a winning product or not a win for us. It's a product we're very capable of manufacturing. A lot of the technology that underpins very comfortable with, very familiar with. So our role really will be to help our customers to ramp up that capability. It does look to be very promising. That's for sure, and there looks to be some -- a lot of demand there and a lot of volume there. So we'd be we'd be very excited to work with a couple of our customers to get some of the products off the ground and ramp them for them. But yes, we think there's a few product areas, OCS is one, LSPs and there's a few new-ish product areas where we're really focused on winning, and OCS is certainly 1 of those, we're excited about it.

Last one quickly for Saba. Just given the capacity expansion plans that you have, -- how should we think about free cash flow for the medium term? Do we see a change in the free cash flow conversion rates on account of the capital plans that you have?

So in the past, we have been a very strong free cash flow generator company. As you can see, our balance sheet close to $1 billion cash on the balance sheet. In the last 2 quarters, we have seen some pressure given the capital expansion and working capital deal now. So in the near term, we do anticipate that to continue. But the good thing is that we are able to still generate 40% ROIC on these investments. So we look at it as a fundamental strategy of our capital allocation, investing in our growth using our own cash to build out this capacity. So in the short term, I think it will be somewhat compressed. But nevertheless, we are still not compromising on the growth and the ROIC that we are returning on...

Okay. Great. I'll wrap it up there. Thank you. Thank you, both on to the conference. Thank you to the audience as well. Thank you.