Soitec, Bernin Ord New

Welcome to Soitec first quarter sales presentation for fiscal year 2027. Today's conference will be hosted by Laurent Roman, Chief Executive Officer, and Albin Jackmont, Chief Financial Officer. For the first part of the conference, the participants will be on listen-only mode. During the questions and answers session, participants will be able to ask questions by dialing hashtag 5 on their telephone keypad. Now I will hand the conference over to Laurent Roman to begin today's conference. Please go ahead.

Hello, everyone, and thank you for joining us today for Soitec's first quarter 2027 sales conference call. I'm Laurent Raymond, CEO of Soitec. With me on the call today, Albin Jacquemont, our CFO, and Alex Petovary, head of investor relations, financing, and treasury. Before turning to the quarter, let me briefly explain why we decided to bring forward to this publication. Since the start of the second quarter, customer demand for photonic SOI has accelerated faster than expected. At the same time, the action plan I set out to increase our photonic SOI production output has started to deliver positive results. These developments gave us materially greater visibility on the pace of our photonic SOI ramp. Consistent with our commitment of transparency, rigor, and timely communication, we choose to update you ahead of schedule. With that, let me turn to the three key takeaways from the first quarter. We deliver a stronger than expected start of the financial year. Revenue reached 113 million euro, up 23% year on year at constant currency and scope, well above our guidance of around 15%. This performance was primarily driven by the continued acceleration of AI-related activities with Photonic SOI sales doubling year on year. Second, the momentum on Photonic SOI is accelerating. Photonic SOI demand remains supported by growing need for high speed, high bandwidth, optical connectivity in data center infrastructure. Our medium-term visibility in photonic SOI is also improving through multi-year commitment from a growing number of customers. These commitments extend beyond fiscal year 27. The group remain focused on scaling its photonic SOI production capacity to support accelerating demand. During the quarter, we achieved an important industrial milestone with the qualification of our Singapore 300 millimeter SOI fab for high volume manufacturing of photonic SOI with first customers. Finally, we continue to execute with discipline and remain committed to strategic direction we set out in May. We are tracking to the plan we set out. With the company position on the cash generation path, revenue is now back to growth, having the way for improved profitability. With that introduction, let me hand over to Albain, who will take you through the quarter in more details.

Thank you all. Good morning, everyone, and thank you for joining us on short notice. Lauren, I greatly appreciate your time and your participation today. Let me now walk you through our first quarter performance, starting out with mobile communications. Mobile communications generated 39 million euros in revenue during the quarter, down 10% year over year on a constant currency and scope basis. Against the backdrop of a still challenging smartphone market, COI adoption continued to gain momentum, while RF SOI customers made further progress in reducing inventory levels. RF SOI revenues were broadly stable year over year, as higher 300 millimeter revenues offset lower 200 millimeter revenues. POI revenues were also broadly flat, as higher volumes from continued technology adoption were offset by lower pricing. POI's position as a core substrate for next generation architectures was further reinforced by the long-term agreement recently entered into with Skyworks, which gives the group greater medium-term visibility. FDSOI revenues were lower year over year, mainly reflecting volume effects in the subdued mobile markets. Turning now to Edge and Cloud AI. Revenues reached 65 million euros in the quarter, up 47% year over year on a constant currency and scope basis. This strong performance was primarily driven by Photonics SOI, where revenues doubled year over year. Demand continues to be supported by the growing need for high-speed, high-bandwidth optical connectivity across AI data center infrastructure, including pluggable transceivers, near-package optics, and co-package optics architectures. In addition to another strong quarter, we continue to strengthen our medium-term visibility through multi-year customer commitments and associated cash deposits with these commitments now extending beyond fiscal year 2027. This momentum continued into the second quarter, reinforcing our confidence in the pace of a ramp up and our medium term growth trajectory. As Laurent noted previously, during the first quarter, we qualified our Singapore facility with the first customers for 300 millimeter Photonics SOI production. This is an important milestone that gives us confidence in the ramp up trajectory as we continue to advance additional customer qualifications. FDSOI revenues in Edge and Flare AI also grew year over year benefiting from a modestly favorable price mix contribution. Let me now turn to edge to the automotive and industrial. Revenue reached 10 million euros in the quarter, representing 108% year-over-year growth on a constant currency and constant scope basis, albeit off a low comparison base. Activity remains subdued as some customers continue to work through elevated inventory levels. Nevertheless, we continue to benefit from strong visibility into 2028 underpinned by a long term agreement with a key customer. Power SOI revenue grew year over year driven by higher 200 millimeter volumes complemented by the initial contribution from 300 millimeter products. Automative FTSOI wafer revenues also increased year on year supported by larger volumes. The technology continued to gain traction in applications such as automotive radar, microcontrollers, and other analog and mixed signal systems. With that, let me hand back to Laurent for the outro.

Thank you, Albert. So before opening the line for your question, let me turn to our outlook indeed. So I take expect Q2 27 revenue to be up more than 30% year on year, notably sustained by acceleration in photonic SOI. Looking ahead, The momentum behind Photonic SOI keeps building as AI architecture progressively adopt optical transceivers. Photonic SOI technology has already demonstrated its ability to address different configuration, such as pluggable transceiver, near package optics, or NPO, and co-package optics, CPO. As the industry is entering the scale-up era with mass production of AI interconnects, our visibility on photonic SOI and demand and our ability to execute are both improving. Assuming no material disruption in the AI market, photonic SOI fiscal year 27 revenue is expected to more than double the revenue generated in fiscal year 26, which was slightly above $100 million. For fiscal year 27, we expect contrasting dynamics across our end markets. In mobile communication, progress in POI should be offset by the ongoing customer inventory correction in RFSOI. in a challenging smartphone market. In automotive, the good visibility stemming from the customer long-term agreement means that any early sign of end market recovery would not be expected to benefit the group this year. By contrast, Edge and Cloud AI Momentum continues to improve, driven by accelerating demand for photonic SOIs. From an investment standpoint, we are addressing this growing demand for photonic SOIs with agility as we leverage the fungibility of our industrial footprint. As a result, Fiscal Year 27 CAPEX cash out is still expected around 100 million euros. Our priorities remain unchanged. We will continue to capture the opportunities created by AI while maintaining disciplined financial execution and selective investment approach. The acceleration we are seeing in Photonic SOI reinforce our conviction that AI will remain a powerful growth driver for Soitec. Combined with the quality of our technology portfolio, our expanding industrial capabilities, and improving customer visibility, we believe the group is well-positioned to capture this opportunity while continuing to execute with discipline. Thank you very much for joining us today. And we are now happy to take your questions.

Ladies and gentlemen, if you wish to ask a question, please dial hashtag 5 on your telephone keypad. If you wish to withdraw your question, please dial hashtag 6. The next question comes from Emmanuel Maytot from AutoBHF. Please go ahead.

Good morning, Laurent. Good morning, Albin. I hope you can hear me well. We do. Thank you. Thank you for all these positive news on photonics. What is your outlook for this key product line beyond this year, even the long-term agreements in place with your customers? Should we expect a strong growth over the coming years or will we see things level off? Second, What is the current status of the copackage optics qualification phase when it is due to be completed? And third, how will the increase in demand for photonics affect your margins this year? The consensus forecast was for an EBD margin of 27% this year prior to last night's announcements. You should be comfortable with this estimate. Thank you very much.

Thank you, Emmanuel. I will take the two first ones, and Albin will reply on the margin. So outlook beyond fiscal year 27 for photonics, too early for us to comment. As we said, we see a good momentum accelerating. We have negotiated with most of our customer capacity reservation agreements that extend beyond fiscal year 27. However, that's a very dynamic market. We are cautious and we will communicate on that once we have more certainty and more visibility. Regarding your second point on Copackage Optic, so most of the revenue we see right now and most of our revenue for fiscal year 27 will be on pluggable and partly NPO as well probably starting. We still see Copackage Optic ramping up at the end of the year on the scale out So especially on the racks, the switching racks for the scale-out. However, that's not the main driver of revenue right now. We expect medium-term to have Copech cage optic as a growth driver. As we see three waves of growth in photonics, so that was the first wave I remind you, we are in photonics for 10 years. So first wave was more telecom driven. There is right now the scale out in the data center. And there will be the scale up starting already. Scale up is starting actually already with the pluggable. And we'll move forward with the co-package And for all of that, we can address with pluggable, NPO, and copackage optics. With that, I hand over to Albin regarding your margin question.

Yes, Emmanuel. Look, obviously, because margin will be impacted by a few drivers this year. So I would like to walk you through these key factors. First, obviously, we will benefit from a powerful mix effect driven by the continued increase in photonics cells. The contribution of photonics product is well above the average at the group, so the mix impact will be powerful. Second, we will see a substantial fab reloading as we progress throughout the year. at around 65% on average for the year, compared with the approximately 60% level we indicated in May. Beware, this reloading impact did not materialize in Q1. It will ramp up in Q2, Q3, Q4. These positive factors, Powerful positive factors will be offset to some extent by some elements. First, fundings embedded in the gross margin will be significantly lower compared to the prior year. To put things into perspective, we expect approximately 30 million less funding embedded in the gross margin compared to the prior year, because the IPCEI 2 is ending at the end of the year. And we don't know when the IPCEI 3 will kick in. Second, price impact will still be negative as a consequence of POI ramping up and the company entering into long term agreement, which gives it visibility But we should see higher profit sharing and share-based compensation items compared to previous years. And last, the dollar hedge is at 1.19 compared with an execution rate of 1.14 last year. Stepping back, I would remind you that we have consistently said that our recovery would be phased. The first phase was cash. We delivered on that commitment in Q4, 2026, and the actions taken by our teams are expected to translate into a substantial improvement in cash generation in the first half of the year. The second phase is a return to growth. The confidence we have expressed in our ability to return to growth is now beginning to translate into tangible results. That's the goal of today. And the third phase is a return to a satisfactory level of profitability by gross margin. and we expect that recovery to be tangible and significant in 2027 and to fully materialize in 2028.

The next question comes from Alexander Petersee from Bernstein. Please go ahead.

Good morning, thank you for taking my question. I'd just like to understand what exactly triggered the massive photonics outlook upgrade. I think you previously indicated more than 30% CAGR, so obviously 100% is more than 30%, but this is a step change here. Is simply qualifying the Singapore line allowing for this surge this year? And how should we think about growth continuing from here? Can you can you add more capacity quickly given the strong demand patterns you see? Secondly, I think you indicated with fully results that growth would not necessarily accelerate from the first quarter. We now get an acceleration already in Q1 and re-accelerating again in Q2. So should we think about the rest of the year as reflecting normal seasonal patterns rather than softer seasonal patterns, which you seem to indicate previously? Thank you so much.

Good. So maybe on your first part, so what has changed is Three things I would say first, we continue to see an acceleration in the demand since May. So the demand from our customer continue to grow. The first one, second point is We are more capable with the action we set in place. And I will come back to that in a second. But we are more capable to qualify this demand, to judge and understand if there are double booking, if they are committed our customer on this demand. So that as well, this increase our confidence. Third is our capability to execute. So one of the first action I took when I took the job was to set in the very first weeks a steering group around Photonic to really mobilize the full company on this topic. across the various organization, operation, business line, sales, finance. So these deliver results and increase our confidence to reply to this demand and execute. So meaning, for example, ensuring we have all the supply that is needed on our side on material from our supplier. meaning we are adjusting our industrial footprint and the tools that we need to adjust to the new product mix, meaning that we are signing this capacity reservation agreement with customer to qualify the demand to have as well the capability to judge this demand and be sure they are committed. And as well, as you said, we made very good progress in the qualification of our Singapore site with first customers starting production already. So all of that explain the change in our tone between May and now. regarding the second part of your question and seasonality. So we are not guiding their quarter. So what we wish to do is to give you a better view on what is ongoing and that you can calibrate as well. That's just what you what you see yourself in the industry. But we are not getting by Quarter, as we told you in May, we are trying to reduce our seasonality. But given the acceleration in photonics, it will be difficult to do this this year. But that's for the best, I would say.

Okay, thank you. Just to clarify, so the Singapore line was initially, I think, was due to come on stream by the calendar year end. So this is the meaningful acceleration, the readiness of that plant, is that correct?

Yeah, so we were sampling. So we had first to sample, then we have our customer to qualify these new products. and so this accelerated and yes indeed this was planned initially more end of the calendar year and we accelerated that with first customers then all the rest of the customer they still have to to to qualify as well this line because we pushed all our customers if they want to increase their capacity to qualify both our Bernin production site in France and our Singapore site. So that's ongoing for some of them. That's done for others.

Thank you very much.

The next question comes from Nigel Van Putten from Morgan Stanley. Please go ahead.

Hi, good morning. Can I start with clarification question just to get a better bearing on on sort of the quarterly developments and photonics. He's confirmed that it was not only up year on year doubling year on year, but also up quite a bit from the first from the first quarter from the fourth quarter last year. And then if I look at the guide for the second quarter, obviously, that's also the photonics can you then should we then expect another material sequential increase in photonics SOI as well? I think it's in the press just confirming this because actually maybe my real question is given the commentary so far, I think there's more customers coming online. So should we see there is a limitation of what you can currently produce per quarter or will that continue to progress into the second half of the year as well? and that's my first question I'll leave it there.

Yeah, so I confirm that there was an increase in photonic between Q4 and Q1 and we expect that to continue through the year. We are exploiting the fungibility that we have between all the SOI products and we are exploiting as well some empty space room. And so we are tuning your manufacturing to reply to the demand. So yes, you should expect this will continue to go. No bottleneck at this stage. As I said in May, as I said in May, this is more for us to catch up quickly with the demand. So it's more a lead time topic than a bottleneck topic. Would this momentum continue even to accelerate big time? As we said, a quarter ago. We have capabilities as well to extend further either in Singapore. We have a building that will need to be equipped at some point. So that's a big decision on us. And we are not at this stage at all right now. But this is something we could figure. and we are starting as well to expand in our B4 module in Bernin for Photonic. So, yes, we are set up to continue to grow.

Perhaps just given timelines are moving around, the Bernin 4 expansion, when should we expect customers to start qualification out of there, or maybe even better yet, when would you expect to start shipping from there? And then maybe related to that, you're making multi-year commitments or getting those from customers. How should we think about pricing for photonics, given that your customers are committing for multiple years at the same time? There does seem to be some urgency. So how is the pricing environment currently? Thanks.

So regarding B4, the good thing is B4 is a module that is connected to B2, meaning qualification of our customer We should be able to do it usually, in that case, by similarity. So that's not a big qualification time for our customer. So for us, it's more equipping before. So we are starting to move in that direction. But you should not expect this before, not before 28. Regarding ASPE, I let you comment, maybe, Alban.

No, we expect pricing, obviously, to remain strong. All the more given, even so, with the high volumes we are contemplating. So we express a message of confidence in pricing.

Okay, thank you very much.

The next question comes from Jakob Bluestone from BNP Paribas. Please go ahead.

Hi, good morning. Thanks for taking the questions. I've got two questions, please. Firstly, on capacity utilization, I think you said you expect an average fab loading of 65% for the year. Could you maybe give us the Q1 number? And then secondly, on the photonics side, I don't know how easy it is, but is there any way to sort of give any color on the sort of mix of the revenue or the orders you're seeing? How much is CPO versus scale across? Thanks.

I refer to 60 to 65% and the reason I did mention the number was that back on the end of May said 60% so overall capacity utilization would be higher. It's not always easy to determine the numbers because it depends a lot in the mix of a product that you manufacture in the factory because time and the utilization of the equipment is very different depending on the product you put. Nevertheless, 65% plus On the first quarter, our average loading was 48%. Noticeably, that's down from 74% in the first quarter of last year, which gives you an idea of the magnitude of of the effort, which was carried out by the teams to reduce ventures and drive working capital back at the right level. And with this number, you can infer what our loading should be for the next three quarters. So you see that the ramp up will be very significant.

on the second part of your question regarding the sound configuration and what part of our business is related to pluggable CPU, NPU and so on. So first thing, the way so first disclaimer, you know, for us, that's not always straightforward. to identify where our wafers end up. Is it a CPO? Is it a pluggable or an EPO? We have a good idea, but that's not always certain. However, our view currently is most of the business we do today is, and the growth is coming from scale out. mostly pluggable at this stage starting so we expect NPO to take some share and we expect CPU in the scale out as well to ramp up end of the year regarding the scale up Again, that's mostly pluggable. We expect here there is a question mark on when CPO will really kick in for the scale up. You know that one of the challenge of the CPO is more on the assembly side and as well on the testing to be sure to which could yield on the overall assembly. So depending how these things progress, NPO could be an intermediate step, or NPO could develop in parallel while CPO will mature as well. For us, we do not see a big difference if this is NPO, pluggable, or CPO. There is roughly the same photonic, so peak solution in all this system, and we are working with all the customers that are selling these various architectures. So bottom line for us, all of them, pluggable NPO and CPO, are great opportunities for us.

Thank you.

The next question comes from Craig McDowell from JP Morgan. Please go ahead.

Good morning, gents. Thanks for taking my questions. Just two for me. The first one, I realize that the agreements that you strike with customers will be different, but maybe you could just give us a flavor of the terms that you're trying to agree with customers on the photonics and what kind of terms you're looking for from your customers. The second one was on RF SOI. You maybe give us an update on the inventory digestion. What are you? What's the country current inventory in the channel and any change your expectations on the digestion through the year? Thank you.

So customer reservation. capacity reservation agreement on customers. So we have a good momentum. Obviously, we are not forcing all our customer to sign capacity reservation agreement. If they want to stay on a more transactional short term view, that's fine for us. And that's the purpose as well for the capacity reservation agreement is to judge the demand and the level of commitment that is customer. Usually what we are asking in this customer reservation agreement is we agree on the price, we ask for a down payment or a deposit, and we ask visibility on the customer inventory to be sure that we are not building inventory down in our value chain. Regarding LFSOI inventory, so if you recall what we say in Q4, due to seasonality, inventory was flat, but we were expecting inventory to go down again through the year, which materialized. In March, we were at 2 million roughly 8-inch equivalent, 2 million wafer 8-inch equivalent in March. Now, we are estimating we are at 1.7 million wafer equivalent 8-inch. So that's in line with what we said previously. bear in mind that we estimate the set out for you at about 1.5 million wafer equivalent 18 inch per year. So which mean we still have some way to go to come back to a pre-COVID level. So we will continue to have action to reduce this inventory.

Thank you.

The next question comes from Oliver Wong from Bank of America. Please go ahead.

Hey guys, good morning. Thank you for letting me ask a question and congrats on the strong Photonics results. So understand that Photonics SOI revenue grew sequentially from Q4 to Q1 and is expected to into Q2. Would you say at this point you're seeing sequential growth for throughout the rest of this fiscal year. And then I'm curious, you know, is this sort of revenue timing more driven by capacity or by just sort of, you know, the availability of your capacity or by just, you know, customer timing? And is there a scope for demand to further increase significantly even for this year? Thanks.

Yes, yes and yes. So, regarding sequential growth, yes, this will continue over the year. This is driven both by acceleration in demand, so from our customer, but as well our capability to execute. And third, yes, if needed, we can got it that's helpful.

And just a quick follow up. How much of the supply or how much of the photonics revenue that you're seeing for this fiscal year do you reckon is driven by customers sort of securing supply ahead of time for perhaps optical ramps for subsequent years, be it for pluggables or for MPO and CPO? Thanks.

So not sure to get your question clearly. So how much is secured by already by new demand or how much was already in place? This is what you mean or?

Yeah, my question is so, you know, currently for this fiscal year, you see photonics SOI revenues more than doubling. I'm curious, you know, in terms of the timing of this, I understand that, you know, you have commitments for subsequent years as well. But how much of the demand, you know, purely for this year, do you think is also driven by sort of, you know, customer obstacle ramps for that they're planning to do for the subsequent years for, you know, let's say, next year and beyond?

So there is a bit of both. So part of the demand is to prepare for next year. But part of the demand is right now for this year and used really in the data center. This is your question. how much is to prepare for our customer for next year ramp and how much is really used directly in data center right now there is a mix of both and that's why as well we are asking to have visibility on the inventory to be sure that our customers are not piling inventory just for expectation for next year that would not materialize

Got it. Sounds good. It's clear. Thank you.

The next question comes from Nigel Van Putten from Morgan Stanley. Please go ahead.

Hi. Thanks for allowing me to ask a quick follow-up. Maybe just on that last point, I think I get that customers sort of need to prepare. So, I mean, there's a way. To interpret this as sort of pre-buying, but would it be fair to say that customers are this year preparing for next year and next year they will prepare for the year thereafter? So, yeah, even though they might want to work with a certain inventory, there's no real sense of this being, you know, driven materially or at all by sort of pre-buying. And I have another follow-up.

Yeah, so a bit the same comment. That's a mix of both. They have to say already, you know, our customers have to say, The demand they see on their side is super short term. And yes, they would like, I believe, to create a bit of buffer in order to be able to not be in line down and as well be sure that they prepare a bit for next year. At this stage, with the inventory level we are requesting, we are not at all at this level, just to be clear. So I got very often Escalation of customer being in line down. They are not ordering things that sit in a warehouse, just to be clear.

Yeah, thanks for that. And maybe, given you've actually given us quite a bit to work with in terms of how current SAP utilization looks, how you look at the full year, there's going to be sequential growth still in photonics. And you've said more than double in the press release, but maybe, you know, that can be interpreted in many ways. Would it be fair to say that there's going to be a quite material gap between, let's say, 100% and what you expect to deliver, maybe multiple teams, at least, based on sort of your current visibility? That's certainly the number I end up with, more towards, you know, growth of maybe 150% or more, given commentary, but just wanted to make sure that I'm doing the math correct.

So currently, what we said more than double is what we see based on the end demand and the current one and our capability to execute. Then we will update you if this change over the year. But that's the best assessment that we have right now. And you can understand that's a very dynamic situation on this topic. You see that as well through the whole value chain on optical. So we give you the best view we have at this stage, keeping in mind as well that we have more than 10 customers. So that's where we are at this stage. And we will update you on that.

Maybe to then ask it in a different way. I think one number I'm kind of missing, or I guess everybody on this call to improve the modeling is really, you know, the actual number you printed in this quarter, in the last quarter, I should say. for photonics, and then we can do our own math. I mean, then we can take into account the guide, which points to sequential acceleration as discussed. And I think you've also alluded to, you know, the second half not being flat from that level, but sequentially increasing as well. So maybe, maybe more straightforward to help us understand how we should think about the contribution, ideally millions reported for photonics in the first quarter.

So yeah, what I can tell you on the Q1, on the 65 million, is Photonic is a strong contributor for the 65 million in the Edge and Cloud AI. So that's the main driver.

I'm sorry, and within Cloud AI, could you maybe say it's more than half, less than half? Just trying again. Yeah, more than half. More than half. That's very clear. Thank you so much.

The next question comes from Robert Sanders from Deutsche Bank. Please go ahead.

Yes, sorry, I joined the call late. But just to ask a bit, I assume this hasn't been asked, just around input costs. What have you seen from your Siltronic and Synetsu partners, wafer partners in terms of potential price increases as you look out in terms of your input costs, and I have a follow-up.

Thanks. As I said earlier, one of the actions we took in order to get better visibility on our capability to execute was to focus as well on our supplier. to be sure we have what is needed. So that's what we have done and we continue to do, having good view currently on our suppliers. So yes, the situation is tense, but is manageable. Overall,

and sorry if we look if we take only into consideration the price at which we sell our products and the raw material prices the difference between the two being what we call the contribution we see contribution improving slightly this year

and we have a diversified base of suppliers. So again, that's something we monitor carefully, but we consider that's manageable.

And just on the global wafer situation and the expiry of their license, how many of your foundries and foundries customers are absolutely insistent that you have a US source, because obviously that's the thing that's really in favor of them. Even if they may not have the best wafer for photonics, they do have a US site. So how much of a strategic disadvantage do you think that is? And how do you think about global wafers' revenue in photonics tailing off? Thanks.

So regarding our footprint and the current market situation, we do not see that as a blocking point at this stage. The focus right now for the industry is to get the path out. So many photonic foundries are actually not in the U.S. if there is one in the US, but most of the other actually are not in the US. And what we see is our customer are very eager to take products either from Bernin or Singapore at this stage.

And just on the patent and the license, sorry, on the license expiry.

You mean licensing regarding global workers? Yeah. So yeah, yeah. Go ahead.

Go ahead. Just saying how should we think about that? Acting you guys? And then them? I mean, presumably more them?

Oh, same story that what we said earlier on last quarter, you know, the license that they have will end up next year. So then we will see what what, what they do. So this will end summer 27.

Okay, thank you.

This concludes the question and answer session. I'd like to hand the program back to Laurent Roman for closing comments.

So thank you for your interest and for all your questions. So the next date in our agenda will be our annual general meeting on July 29th. We will publish our H127 results on November 18th and this ends the call for today. Thanks a lot everyone.

This concludes today's call. You may now disconnect.