Operator
Conference Call Operator
Greetings and welcome to the UiPath 3rd Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. If anyone should require operator assistance, please press star zero on your telephone keypad. A question and answer session will follow the formal presentation. You may be placed into question queue at any time by pressing star one on your telephone keypad. We ask that you please ask one question and one follow-up, then return to the queue. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Monica Gould, Investor Relations for UiPath. Please go ahead, Monica.
Monica Gould
Investor Relations
Thank you. Good afternoon, and thank you for joining us today to review UiPath's third quarter fiscal 2025 financial results, which we announced in our earnings press release issued after the close of the market today. On the call with me are Daniel Dinas, UiPath founder and chief executive officer, and Ashim Gupta, Chief Financial Officer and Chief Operating Officer, to deliver our prepared comments and answer questions. Our earnings press release and financial supplemental materials are posted on the UiPath Investor Relations website, ir.uipath.com. These materials include gap-to-non-gap reconciliations. We will be discussing non-gap metrics on today's call. This afternoon's call includes forward-looking statements, including regarding our financial guidance for the fourth quarter, fiscal 2025, and our ability to drive and accelerate future growth and operational efficiency and grow our platform, product offerings, and market opportunity. Actual results may differ materially from those expressed in the forward-looking statements due to many factors, and therefore investors should not place undue reliance on these statements. For discussion of the material risks and uncertainties that could affect our actual results, please refer to our annual report on Form 10-K for the year ended January 31, 2024, and our subsequent reports filed with the SEC, including our quarterly report on Form 10-Q for the period ended October 31, 2024 to be filed with the SEC. Forward-looking statements made on this call reflect our views as of today. and we undertake no obligation to update them. I would like to highlight that this webcast is being accompanied by slides. We will post the slides and a copy of our prepared comments to our investor relations website immediately following the conclusion of this call. In addition, please note that all comparisons are year over year, unless otherwise indicated. Now, I would like to hand the call over to Daniel.
Daniel Dinas
Founder and Chief Executive Officer
Thank you, Monica. Good afternoon, everyone. Thanks for joining us. I want to take a moment to thank our team for their improved execution and our customers and partners for everything they do to make UiPath successful. Our third quarter results exceeded the high end of our guidance across all key financial metrics, a testament to our improving execution and the compelling value that our AI power automation platform delivers to our customers. We ended the quarter with ARR of 1.607 billion, an increase of 17%, driven by net new ARR of 56 million. Third quarter revenue was 355 million, and we delivered non-GAAP operating income of 50 million. As many of you have seen, We unveiled our vision and roadmap for agentic automation at our Forward User Conference in October. In the coming months, the entire UiPath community will be able to build, maintain, and deploy agents, significantly expanding the surface area of automation with their companies. This will mark our most consequential product launch in years. AI agents will be first-class citizens on our platform. They will use UiPath robots to securely access corporate systems and databases to harvest information for agents to act on. Our customers are already embracing the revolutionary potential of UiPath agents with enthusiasm. I'll quote a large global airline customer. who recently told us that this shift toward agentic automation is not just an upgrade, it's a paradigm shift in how we perceive the potential of our operations. Customers are excited about the agility and creativity that our agents bring and are comforted by the security, governance, compliance, and accuracy afforded by our robots and our overall platform. We are excited that AgentBuilder has begun accepting registrations for our private preview, which will begin later this month. We've had the fastest pace and the largest number of registrations in our company history, with over a thousand organizations signed up so far. As an example, two weeks ago, One of the customers we hosted at our headquarters in New York City is the head of AI of a Fortune 50 healthcare and insurance company. Following demos of our new agentic automation capabilities, including agent builder and agentic orchestration, the healthcare company is moving quickly to put our new agentic capabilities to work. I believe that with agentic automation, the long tail of complex unstructured tasks to automate and enhance is now in play. I'm sure you have heard announcements from software companies announcing single agents that will help search data across CRM or submit an expense report. What differentiates UiPath are three things. Our agents and robots work across all applications, both new and legacy, eliminating vendor lock-in for our customers. Business processes today don't run on a single system. We will continue to be the Switzerland of business applications and agents, providing equal access to third-party systems. Second is governance. agentic orchestration will be the conductor or the governor across agents, robots, people, and models. Third, we will democratize access to agents by leveraging our low-code platform that is already known to automation developers. The feedback from industry analysts has also been encouraging. IDC is already forecasting the market for agentic labor automation to grow to $4.1 billion by 2028 from zero last year. This is on the top of an RPA market, inclusive of IDP and test automation, that is growing at a double-digit rate thanks to the tailwinds and disruption of Gen AI. The direction of the market. can be seen in our current customer conversations and deals. I'm really excited that our largest deal in the quarter was for building an agentic use case delivered via our autopilot for everyone, for a healthcare customer who has been with us since 2018. Our solution will enable such use cases to be built easier and faster as we deliver on our product roadmap. AI has always been at the center of our platform. Over the last few years, we have integrated GenAI throughout our platform, including IDP, and we are now seeing the fruits of those efforts. With the support of their CIO, Volkswagen Financial Services will now standardize on the UiPath platform across the company. They will implement our IDP products in the cloud to automate customer communications and complaint management. Autopilot also offers the potential for over 5,000 employees to increase productivity. So far, the company has realized cost savings of well over 10 million euros per year. and increase customer satisfaction through its online portal and financial services business. At Forward, we also announce the general availability of Autopilot for everyone, our agent with the conversational experience that enables any employee, regardless of technical ability, to complete complex tasks ranging from getting answers grounded with their own organization's data, analyzing and extracting information from documents, automating copy-paste into apps, and running automations to improve productivity. Protiviti, a longtime customer and platinum partner, recently expanded its usage of and capabilities in our technology. including autopilot, with the express purpose of enabling their consultants to better use automation to deliver value to their customers, including numerous as-a-service models and putting leading-edge automation technology into the hands of their operations teams. Our agency capabilities will permeate across our platform and continue to differentiate us. A great example of this is our test automation capabilities. In fact, our agentic testing offering is positioning us as the thought leader in the test automation industry. With the addition of Autopilot for testing earlier this year, we greatly enhanced the AI power capabilities of our test suite. With the ability to automatically generate test cases, our offering will unlock a key market for us as we look to build upon our momentum in the agentic automation era. Vibron, one of the world's leading medical technology companies and the customer since 2019, selected TestSuite for test case creation. to aid in testing for their SAP S4 HANA migration. They expect to see significant cost savings from eliminating manual testing with additional improvements in employee engagement and experience. Our platform ability to integrate automation and testing was the key differentiating factor over other competitive vendors. I have become increasingly convinced that manual testing remains a real and sizable roadblock for business agility. I'd like to focus the remainder of my comments again on the launch of agentic automation over the next few months, our partnership with SAP, and our overall partner ecosystem. In February, we plan to unveil Agent Builder in public preview. It will be launched as a core part of UiPath Studio, offering our customers a seamless experience for both robotic and agentic automation. Agent Builder allows users to build agents either from scratch in our local development environment or from a pre-built template in the UiPath agent catalog that works in tandem with our robots. Customers will also be able to include third-party agents in their agentic workflows if they choose. To maximize the value of agentic workflows, we'll also launch agentic orchestration, which empowers organizations to orchestrate their long-running complex enterprise processes across humans, robots, and AI agents, and operate them with governance and that scale across systems of engagement and systems of record. Customers can orchestrate agents built either using the UiPath agent builder platform as well as agents built using other platforms. Using our new agentic orchestration capabilities, customers can design, implement, monitor, operate, and optimize complex business processes through the entire process lifecycle. We are planning a public preview of agentic orchestration in the first quarter of fiscal 2026. As you can see, our focus is on enterprise-grade agentic automation, where security, governance, control, and compliance run throughout everything we do. For our existing community of 3 million users, jumping in and getting started building managing and deploying agents will be straightforward. I expect we will quickly have a large pool of developers building true agentic workflows across business-critical processes. We are also committed to reach customers that are less aware of our platform, particularly in today's sea of agentic AI marketing. To this end, we are investing in driving awareness of our capabilities. And we will have a growing stream of use cases that will quickly underscore our capabilities and differentiation. Partners remain a cornerstone of our go-to-market strategy, enabling us to scale our market reach and elevating our customer success initiatives. And I am excited. about our continued progress with SAP. In October, our platform was integrated into the SAP Build Process Automation solution and is now being sold as one of the SAP Solution Extensions, or SOLEX, delivering a seamless experience for SAP users to create, execute, and monitor automations from a single platform. This integrated solution enables true end-to-end automation across diverse IT landscapes, improved efficiency and productivity across SAP and non-SAP workloads. It also reduces long-term total cost of ownership within a supportable governable approach that moves custom code to the automation layer and faster implementation by leveraged pre-built solution accelerators. While partnerships take time to build pipelines together, our SAP partnership has already helped us to win new logos, such as a leading data storage company based in the U.S., which needed support following the S4 HANA transformation. They will now be implementing UiPath to automate processes within SAP, such as their finance and supply chain functions. In addition to helping secure new logos, our partners also support expansions. One that I would like to highlight is the deal facilitated by SAP with one of the largest US oil and gas companies. The company currently has over 1,000 automations in place with their finance and downstream operations and have now chosen to expand further with UiPath to automate within the S4HANA environment. Our GSI partners also continue to drive our growth in the market with the support of EY, Sonic Automotive, one of the largest car dealership groups in the US, expanded their automation program to additional departments such as customer service, share services, and human resources. They will also be expanding their usage of document understanding for warranty cancellation and factory invoice processes. while adopting new products such as process mining, communication mining, and test suite for automation testing. They have seen an impressive ROI of over $10 million in cost savings per year with expectations for further improvement. And finally, our success is deeply rooted in our ability to serve our customers making a customer-centric mindset more crucial than ever. While customer-centricity and co-innovation remain a core pillar for us today, we are working diligently to infuse it deeper into our culture. To us, being customer-centric means listening, rapidly applying feedback, co-innovating our roadmap, and building a trusted partnership. All of this in the spirit of maximizing the value our customers realize from our offerings, which we believe will translate to growth for UiPath. To summarize, I'm really excited about the enthusiasm from our customers in support of our vision and the products we have on deck to deliver on the vision. We believe that agentic automation will have a major impact on the workplace. And it is clear that it is only going to rapidly become more powerful and sophisticated. We are confident that UiPath is well positioned to bring the transformative force of AI to life in the enterprise throughout automation. With that, I'll turn the call over to Ashim, who will dive more into our operational priorities and financials.
Ashim Gupta
Chief Financial Officer and Chief Operating Officer
Thank you, Daniel, and good afternoon, everyone. Unless otherwise indicated, I'll be discussing results on a non-GAAP basis, and all growth rates are year-over-year. I also want to note that since we price and sell in local currency, fluctuations in FX rates impact results. Turning to the third quarter, ARR totaled $1.607 billion, an increase of 17%, driven by net new ARR of $56 million. We ended the quarter with approximately 10,790 customers and are pleased with our focus on the quality of new logos we are acquiring, such as Amplitude, Aqua Dermatology, the Hospital for Special Surgery, and Ventura Foods. Moving on to customer metrics, customers with $100,000 or more in ARR increased to 2,235, while customers with a million dollars or more in ARR totaled 302. Dollar-based gross retention of 97% continues to be best in class, and our dollar-based net retention rate for the third quarter was 113%. Our platform's ability to help customers obtain meaningful value with AI-powered automation continues to drive expansion opportunities. A great example is Allianz Technology, a customer since 2017. They recently implemented communications mining and document understanding to automate their policy renewal and new business request processes. And after a successful implementation, they will be now moving to the cloud to expand their usage and automate these processes enterprise-wide. Additionally, the UiPath platform will now be standardized across all Allianz business units as their strategic AI and automation vendor with expected productivity gains of 50% and cost reductions of 40% where AI-powered automation is implemented. Another example of customers expanding to our end-to-end platform capabilities is a national fund for health insurance in Europe. They started working with us in 2022 to automate health insurance control processes, and now with the support from their CIO, will be expanding to the full platform. They will first begin by implementing process mining to uncover further automations and support their automation backlog of over 300 processes. Following this, they will be deploying Autopilot for testers to support their IT developers and IDP for health insurance claims. They highlighted our orchestration capabilities being a key factor in providing them the ability to scale their automation program in a secure and governed environment. Turning back to our results, revenue grew to $355 million, an increase of 9% year over year. Remaining performance obligations increased to $1.128 billion, up 13% year over year. Current RPO increased to $718 million, up 20% year over year. Turning to expenses. We delivered third quarter overall gross margin of 85%, and software gross margin was 89%. For the full fiscal year 2025, we continue to expect gross margin to be approximately 85%. Third quarter operating expenses were $251 million. Gap operating loss of $43 million included $87 million of stock-based compensation expense. Non-GAAP operating income was $50 million, resulting in a third-core non-GAAP operating margin of 14%, which benefited from our previously announced restructuring, combined with our continued efforts to drive further operational efficiencies and streamline the business. Non-GAAP net income was $60 million, which excludes a non-recurring non-cash tax benefit of $25 million from the release of valuation allowance on certain deferred tax assets. Third quarter non-GAAP adjusted free cash flow was $33 million. We continue to expect fiscal year 2025 non-GAAP adjusted free cash flow to be approximately $325 million. As of October 31st, we had $1.6 billion in cash, cash equivalents, and marketable securities, and no debt. During the quarter, we repurchased 13.8 million shares of our Class A common stock at an average price of $11.81 from August 1, 2024 through October 31, 2024. Since October 31, under a 10b-5-1 plan, we repurchased an additional 0.7 million shares at an average price of $12.57 through December 4, 2024. Before moving to guidance, I would like to share an update on a few of my priorities since taking on the additional role of COO. First, we have deepened our relationship with our partner ecosystem to help drive further alignment with our customers while also focusing on enhancing our professional services strategy to better support customer engagement and adoption. And we are working to better connect and streamline the organization to improve operational discipline and efficiency while retooling certain go-to-market functions to focus on areas with the strongest return on investment. For the fourth quarter fiscal 2025, we expect revenue in the range of $422 million to $427 million, ARR in the range of $1.669 billion to $1.674 billion, non-GAAP operating income of approximately $100 million, and we expect the fourth quarter basic share count to be approximately 551 million shares. Finally, we will provide guidance for the first quarter and full year fiscal 26 when we report our fourth quarter results. But I would like to highlight that we expect typical enterprise seasonality from the fourth quarter to the first quarter in net new ARR. Lastly, with our focus on efficiency, customer centricity, and product innovation, for fiscal 2026, We believe that net new ARR dollars will stabilize and our adjusted free cash flow growth rate will accelerate. Thank you for joining us today, and we look forward to speaking with many of you during the quarter. With that, I will now turn the call over to the operator. Operator, please poll for questions.
Operator
Conference Call Operator
Thank you. We'll now be conducting a question and answer session. If you'd like to be placed into question queue, please press star 1 on your telephone keypad. We ask you to please ask one question and one follow-up, then return to the queue. Once again, that's star one to be placed in the question queue. If you'd like to remove yourself from the queue, please press star two. And as a reminder, please limit yourselves to one question and one follow-up, then return to the queue. Our first question is coming from Mark Murphy from J.P. Morgan. Your line is now live.
Mark Murphy
Analyst at J.P. Morgan
Thank you very much. And my congratulations on the successful execution this quarter. Daniel, I wanted to ask you, as we look around and see the agentic models that are being rolled out by Salesforce, Microsoft HubSpot, and several other companies, can you comment on whether any of that activity might drive some UiPath usage? Because I'm just wondering, as the third-party agents begin to want to take some action, and they want, they might want to command and control other applications. Do you think that's going to be API based where they can handle it? Or do you, do you think that there could be some involvement with, um, you know, there might be a, there might be a UI based process and it, and it might get, uh, you know, it might call on UI path. Then I have a quick follow up.
Daniel Dinas
Founder and Chief Executive Officer
Hi Mark. This is a great question. And, uh, I think it goes into our strength as we, um, as we said in the script, we aim to be a Switzerland of agents. So that means that we would like to orchestrate our own agents, but also agents built by other companies. And also we said agents will be actually as good as the tools that they will have access to. And we want to actually collaborate with other companies building agents to offer them our tools to improve the quality of the actions that the agents can take. So I think in short, we want to focus on creating this agentic orchestration layer that can call our agents, other companies' agents, our robots, and bring humans in the loop for increased security and governance.
Mark Murphy
Analyst at J.P. Morgan
Okay, I think I understand that. It sounds like a very broad vision. I wanted to ask you, Ashim, I'm looking at the growth rate of your largest revenue stream, which is the maintenance and support revenue, and I noticed it accelerated both sequentially and year over year, and it seems to be holding on to a mid-20s type of trajectory. So I wonder if I could just ask you mechanically, what is it that's enabling that That line item is really showing a lot of resiliency and stronger growth actually than the ARR line. And just in case the answer is a little bit of duration, you know, duration impacting the license line, can you maybe help us separate out any of that? I'm just wondering if you can just help us a little bit with some of the mechanics.
Ashim Gupta
Chief Financial Officer and Chief Operating Officer
Yeah, the 606 line, obviously 606 revenue recognition impacts the license line mark. What you see on the main line is also the benefit of just cumulative net new ARR building and the recovery of duration from earlier this year. That does help that as you go through it. Our largest customers are growing. You know, they're continuing to extend the contracts, and that really helps the maintenance and support stream as well.
Mark Murphy
Analyst at J.P. Morgan
Okay. Are you able to comment on how the duration might have changed in this most recent quarter? Or how much it's recovered since earlier in the year?
Ashim Gupta
Chief Financial Officer and Chief Operating Officer
It's recovered back to somewhat normal from earlier this year. Mark, where we talked about some of the execution misses in first quarter, we feel really good about the progress as we change the incentive compensation plans and you refocus the sales team.
Mark Murphy
Analyst at J.P. Morgan
Understood. Thank you very much.
Operator
Conference Call Operator
Thank you. Next question today is coming from Ramo Lenshow from Barclays. Your line is now live.
Ramo Lenshow
Analyst at Barclays
Perfect. Thank you. Daniel, I wanted to go back to that agent model. How should we think about that? There's going to be the big vendors that have the domain data, like a Salesforce or Workday or an SAP, and they're going to be very broad based in terms of their orchestration. Do you see yourself working with those, but actually the real push for you guys will be on more specific domain knowledge where you're playing already at the moment with insurance companies, banks, et cetera. Is that kind of the right way to think about it? Or I'm just, you know, there's a lot of confusion out there. So if you could help us there, that would be helpful. And I have one follow-up for Ashim.
Daniel Dinas
Founder and Chief Executive Officer
Yeah. Hi, Remo. I think the right thing, the right way to think about our approach to agenda is that companies like Salesforce, for instance, they will build more in application agents. They will build agents that will have intimate access to Salesforce and processes that are within the Salesforce ecosystem. But if you have an agent that has to touch both Salesforce and Epic, and this is a real discussion that I was having recently with the CIO of one of our top healthcare providers in the US. Are you going to take the Epic data and you put it into your Salesforce They say no way. So I think our sweet spot is when an agent will have to interact with multiple systems. And this is where actually our robotic automation was shining. We are known to automate moderate to complex processes that span multiple systems, modern and legacy. I think our sweet spot for building agents will be similarly for those agents that require data and interaction with multiple systems, both modern and legacy.
Ramo Lenshow
Analyst at Barclays
Okay, perfect. Thank you. Hashim, I get the message on the net new ARR and net new ARR and stabilizing next year on the growth rate side. Like what gives you the confidence for that? Like maybe just give us a help us a little bit with some handholding here. Thank you.
Ashim Gupta
Chief Financial Officer and Chief Operating Officer
Yeah. So I think when we look at the business, we're really pleased with the progress we've made on the execution front. The momentum that we have leaving forward on a Gentic, as we've commented with some of the fortune 50 customers and, addition to just company-wide. Rymo, that feels very good. We're executing, honestly, is improving around all aspects from just the rigor that we have with our sales pipeline management and the visibility that we see. So we feel confident making that statement just as the business continues to progress.
Ramo Lenshow
Analyst at Barclays
Okay, perfect. Thank you. Well done.
Operator
Conference Call Operator
Thank you. Next question is coming from Jay Roberge from William Blair. Your line is now live.
Jay Roberge
Analyst at William Blair
Hey, thanks for taking the questions. Sounds like execution has been improving recently. Can you just talk about the go-to-market changes that you've been able to make thus far? And then what do you feel is left within the go-to-market in order to get things back to kind of steady execution that we used to see?
Daniel Dinas
Founder and Chief Executive Officer
Yeah. Hi, Jake. Look, we are pleased with how the improvement that we were driven in the go-to-market has are evolving as uh we said in the in the last calls we focused a lot into simplifications into our go-to-market model and into eliminating silos bringing more functions into the regions closer to the customers we have created recently a customer-centricity office that has our top executives being closer to the customers. So, look, we are still into – we have a lot of things to continue to do, but I am pleased of how the things are evolving for now.
Jay Roberge
Analyst at William Blair
Okay, very helpful. And then can you talk about just the feedback that you've gotten from customers coming out of your Ford conference and maybe the pipeline that you were able to generate there and what you're hearing from customers just around the Gentic use cases that they might be building on their platform, just given that you had so many customers and partners there at Ford recently?
Daniel Dinas
Founder and Chief Executive Officer
Yeah, let me start on the sentiment on my left, Ashim, comment more on the pipe generation. Look, it's been a very transformational forward for us. I think it was the most consequential forward since forward three when we have announced our platform offering. There is an extreme interest on our agentic offering. And it's from customers across the world. Actually, prior to forward, I was traveling almost six weeks across the world. And I... basically tested what we are doing when our messaging about agentic with various customers in big banks in Japan and the Middle East, healthcare companies in US and Europe. And frankly, they listen and they are very interested. Like we said in the script, even like, you know, such a huge healthcare customers of us, it's hearing the pitch, They start, you know, they said next Monday we want to start the POC with you guys. And this new messaging, I think it's revigorating our discussions with customers. It's easier to get the attention of the C-level executives with this messaging. We are seeing a clear way to expand into the use cases that we are capable of automating so far.
Ashim Gupta
Chief Financial Officer and Chief Operating Officer
Yeah, and then in terms of the pipeline, obviously we don't really comment in terms of quantification. But qualitatively, you know, what Daniel's talked about in terms of the interest from the customers, that bolsters the pipeline in our minds in terms of just giving us more conviction on a lot of the opportunities ahead of us. The second piece, if you heard it in Daniel's script, is just the number of registrants or registrations on our private previews. and the excitement that's building on the public preview, those are all very encouraging for us.
Jay Roberge
Analyst at William Blair
Great. Thanks for taking the questions, and congrats on the study execution.
Operator
Conference Call Operator
Thank you. Next question is coming from Brian Bergen from TD calendar line. He's now live.
Brian Bergen
Analyst at TD Calendar
Hi, guys. Thank you. A follow-up question first on the changes that you do still want to make internally as you're aiming to return to those external routes. It sounds like you're pleased with the execution thus far, but specifically, what else do you have left to do?
Ashim Gupta
Chief Financial Officer and Chief Operating Officer
I think the majority of the changes, actually, Brian, like on the streamlining are complete. You know, where we're really focused now is here to really prioritize our dollars where you have the highest return on investment, especially as we're planning for next year. So our view is to invest within the field, invest in the functions that are closest to the customers, and continue to find efficiencies in the functions that are further away from the customer and the spend that is further away. That combination for us feels very good. The second piece is just actually on a positive note enabling the sales team with agentic and the messaging coming out of Ford. There's a lot of energy around it and making sure that we have a really good sales enablement system function that will drive that messaging and enablement for the sales team is also a priority for us.
Brian Bergen
Analyst at TD Calendar
Okay, I appreciate that. And then, you know, U.S. government is a notable customer for you across many agencies. Just given all the talk about improved government efficiency here in U.S., how are you thinking about that market opportunity going forward?
Daniel Dinas
Founder and Chief Executive Officer
Yeah, I think, look, as we said, the opportunity is great in front of us. We are seeing internally such a positive energy that we have not seen in a long time in the company. I am seeing in the product and engineering kind of the fastest pace of innovation that I think we've seen from the beginning of the inception of our company.
Ashim Gupta
Chief Financial Officer and Chief Operating Officer
And Brian, on Federal specifically, I think They respond very well to the innovation. I think we talked about functions like the IRS, et cetera. We see good momentum there. I think an uncertainty election cycle obviously keeps there, but actually efficiency for us is a positive sign, right? Going and driving and making sure there is more automation, there is higher efficiency. We feel like that is an area that we can continue to partner very well with the government, and that's so far been the response that we've gotten from our government customers.
Operator
Conference Call Operator
Okay, makes sense. Thanks. Thank you. Next question is coming from Matthew Hedberg from RBC Capital Markets. Your line is now live.