Illumina, Inc. (NASDAQ:ILMN) UBS MedTech, Tools and Genomics Summit 2023 Conference Transcript August 17, 2023 12:00 PM ET

Executives

Salli Schwartz - Vice President, Investor Relations

Analysts

John Sourbeer - UBS

John Sourbeer

Hi. I am John Sourbeer, one of the life sciences analyst here at UBS. Final day of the 2023 UBS Life Sciences Conference here -- of the life science portion here with a fireside chat with Illumina. Joining us today is Salli Schwartz, VP of Investor Relations. Salli, thanks for joining us.

Salli Schwartz

Yeah. Thank you for having me.

Question-and-Answer Session

Q - John Sourbeer

So you guys recently reported 2Q earnings last week, but maybe just start off with a recap in the lower guidance. There’s certainly been larger macro issues throughout the life sciences industry, but maybe some of the puts and takes on China slower than expected NovaSeq X ramp and some of the general budget pressures across customers?

Salli Schwartz

Sure. And maybe just as a quick recap, we previously had guidance for core Illumina growing 6% to 9% -- a range of 6% to 9% for 2023 and we lowered that guidance to flat -- approximately flat for the year. So, obviously, meaningful takedown, which is frustrating, but temporary in a lot of the drivers.

So you mentioned some of the drivers just to put some numbers around them, about 25% of the variance is related to China and I am sure you have seen other companies as well, we have had our own challenges there, we had anticipated a recovery in the back half of the year in China from a macro perspective and that’s just not happened. So, certainly, that’s been a negative to our growth for the year.

In addition to that and something more specific to us, we have seen a more competitive landscape there, more steeply discounted pricing coming from our primary competitor and that’s also created a lower win rate on our part and that’s been -- something else that’s been a negative. So about 25% from China.

The other 75%, it’s roughly evenly split between the two other factors that you mentioned, John. So transition to NovaSeq X has been going really well, lots of demand, lots of placements that we have put in the market.

On the flip side, that Slide 2, some of our customers bleeding down their 6000 -- NovaSeq 6000 consumables faster than we had anticipated. It’s also allowed us to see earlier on some of the technical issues that you typically run into once you roll out a new instrument and getting out to all of our customers and fixing those issues, it’s taken longer. So not a negative necessarily, but a push out of some of the consumables purchases than what we had originally anticipated, as well as a faster bleed down.

And then the final piece is really very macro-related. So despite some hopefully positive signs in macro data out there in the world, Walmart certainly doing better with what it’s seen from its consumers. Some positive retail sales, some positives on inflation, some hopeful things around the Fed and other central banks. Our customers are being really careful and cautious with their purchasing and we have seen that play out in terms of just longer time to get to purchases, more cautious spending, more disciplined expense management and that’s certainly been a hit to what we thought would be a bit of a recovery in the second half of the year. So across those three take down this year, we are still very excited about what’s ahead of us in terms of the ramp-up starting in the fourth quarter with consumables on the X in particular.

John Sourbeer

Excellent. I did want to mention, we do have an iPad here. If you have questions in the room, there’s a QR code. We can take them up here on this. So thanks for the overview on the macro situation there in 2Q. Looking into the NovaSeq X launch, demand still remains strong there, guidance was raised on placements for the year. Could you just provide a little color on the breakdown of the next cohort of orders you have seen come in, I guess, since 1Q or since 2Q and just a breakdown of where those customers are coming from, maybe how many of those are new to high throughput or new to Illumina and how we think about that?

Salli Schwartz

Yeah. No. It’s a -- we said we would give updates on orders once a quarter. So the last update we gave was during the second quarter earnings. We said we had received cumulatively about 260 orders. So that’s roughly about 60 coming in the second quarter. And we have continued to see about 40% of the orders come from clinical customers, which is different than what we have seen in past rollouts, especially the NovaSeq 6000 on the high throughput side.

So more early interest from that customer base, which is really exciting to see, because their purchasing in X is not at this point to replace the work that they are doing, maybe on the 6000, but rather incremental to build a new test or a new process and so that’s additive to what we have already got going on with the 6000.

In terms of new to high throughput or new to Illumina, we had talked in the first quarter about roughly 15% of the orders being customers, again, that are either new to Illumina or new to high throughput.

And some of the new to Illumina come from the capabilities that DX has around ambient shipping. So we have been able to chip consumables now without all the dry eyes and the packaging and the boxes and everything that we have historically had to use.

And while that may not seem like a big deal is a huge deal to our customers and it’s opened up some new geographies and new customers that we haven’t been able to access before. So we have continued to see good uptake on some new names and also some customers taking this opportunity to move up the spectrum mid-throughput to high throughput.

John Sourbeer

So, I guess, just one point that you mentioned there on just ambient shipping. So it sounds like that’s opening up new geographies. Just additional color there and maybe what geographies are now coming online for sequencing?

Salli Schwartz

Yeah. So we have had -- I think we had last put some numbers out there, 35 or so different countries that we are selling into there with -- and that’s just early days so far. So we think of more far flung regions the world more emerging markets where maybe cold chain is not a given and you had to be more careful about being able to not have consumables arrive that you immediately have to throw away, because they had expired.

Those are the sort of markets that we are seeing come online and we are seeing more discussions come from those countries as well. I think certainly, the process of COVID, if I could call it that we all went through has risen the visibility of genomics as an interesting opportunity for healthcare broadly.

John Sourbeer

Thanks. And I think now it’s been about two quarters instruments in the field. Just what’s been the initial feedback you have had from users, any learnings, updates, how -- what’s been the feedback there?

Salli Schwartz

Yeah. And a very, very positive feedback and enthusiasm, which is exciting, because we can all use some enthusiasm for what’s possible. So we have had a number of open discussions. I mean, if you think back to our Illumina Genomic Forum in the fall, we tried to facilitate the gathering industry folks to really work with each other and then push things forward, not just for Illumina, but more broadly for the industry. That’s continued and we have continued to facilitate those conversations. So a lot of excitement for what’s possible here.

I would say, in terms of learnings, one thing that’s been interesting in this rollout, I referenced a little bit earlier, we have rolled out more Xs faster and to more places than we have done any launch before and so that’s great, except.

It also means it’s a lot more challenging. It takes a little bit more time to work through the support you need to provide your customers as they continue to bring these instruments online. So that’s part of as we talked about why guidance is coming out a little bit. It’s taking longer to get to everybody and make sure they are ready to plow ahead with their work, but feedback so far has been pretty phenomenal.

John Sourbeer

Thanks. And that kind of leaves the next question, just maybe that slower rollout of the NovaSeq X was highlighted in the earnings call. Just any color on how throughput is tracking maybe even versus internal expectations and it sounds how do you expect this to ramp as the instruments go online?

Salli Schwartz

Yes. It’s really early. So I know when we initially launched the X, we talked about, call it, six quarter or eight quarters to just get some stability, because if you think of what pull-through is, it’s consumables purchases as a numerator and the installed base of the denominator currently with the installed base growing very rapidly.

Consumables purchases, we have had some so far and we have had the 10B flow cell available, the 25B flow cell becomes available, we will have more, we are starting to see the beginnings of this ramp here, especially as we get to the fourth quarter. But it’s very early and so that number is moving around a lot. We will give you an outlook on it as soon as we can get a little bit more stability there.

John Sourbeer

And just can you remind us on the 25B flow cell, when do you expect that to come online, start shipping there?

Salli Schwartz

Yeah. And so fourth quarter, so very highly anticipated by our customers and all eyes internally on getting out of the door and delivering on the full promise of what the NovaSeq X can do.

John Sourbeer

And it sounds like some of the NovaSeq X users still are using their NovaSeq 6000s. I guess how do we think about the replacement ratio and upgrade cycle for the 6000 now that you have sending the place in NovaSeq X?

Salli Schwartz

Yes.. We have, call it 1,000 or so NovaSeq 6000 customers and for that 1,000 customer base, about 750 of them only have one NovaSeq 6000. So for them it’s a binary choice. They are going to buy an extra they won’t. We think over time everybody will replace their 6000. But you can’t buy half an instrument or a third an instrument. So it’s one or nothing or more.

And then for the other 250 customers who have multiple instruments, we have already seen a number of multi-unit purchases, about 20% of the orders have been multiunit purchases, which is more or less keeping pace with the 25% of the customer base that has multiple units.

So -- and one other thing on that will -- we have started to see and this is part of why we have some confidence in the order book going forward. Some of those initial customers that got early instruments come back around again and place follow-on orders, which is great.

John Sourbeer

And I guess, similarly on the NovaSeq 6000, I think, there’s some pull-through. There’s macro headwinds here with pull-through over the near-term, but how do we think about that tracking then as you start to see those replacements come in for the NovaSeq X?

Salli Schwartz

Yeah. It’s going to come down and the same that we have experienced with prior transitions from one instrument to the next. And like you said, we already brought down the average pull-through for the 6000 to 800,000 to 900,000 range in this recent earnings call. So we have seen that come down faster than we expected to this year, which is one of the reasons we brought that down and then also one of the reasons why guidance has come down a bit.

So more on the research side, as customers look to really pick up work and move it over and then accelerate from there. Clinical side, we will hold on longer with the 6000. They have tests and processes that are already validated in those, let’s take a lot more effort to move.

John Sourbeer

And just maybe one more here on the NovaSeq X question from the audience. But placements has been strong. I guess you have the new flow cell hitting in the fourth quarter. Is there a sample there, I guess, when do you see this catalyst happening, when all this starts to increase, maybe even if you look at previous launch cycles, how this could play out?

Salli Schwartz

Yeah. We expect to start to see it in the fourth quarter. The availability of that flow cell. We have worked through instruments getting ready to come online and we are really starting to see some take-off points.

Now there’s hopefully some little bit of budget flush, I mean, I don’t want to overstate that, but I think it’s every little bit helps. So fourth quarter is -- when we expect to see and you can see that in our guidance as a start of a ramp.

John Sourbeer

And actually, one more here, some of your customers on the liquid biopsy side or saying they are starting to switch to the NovaSeq X. I guess, how do you see this impacting adoption pull-through revenue on that as well?

Salli Schwartz

Yeah. There are some very exciting areas and I think this is part of what I mentioned earlier with the customer excitement. As you listen to a number of our peers and our customers, the mentions of liquid biopsy and all the things that could get done the promise there and just the ease-of-use relative to tissue samples to collecting on the collection front. So that’s very exciting.

MRD is another area that pops up in a lot of customer discussions around what they want to get done or what they are building into. You have seen this morning more news on the single-cell side and there’s a lot of movement broadly across the space. If we could get a better economic sentiment to support it, I think, there’s a ton of opportunity here.

John Sourbeer

Great. So let’s move on to mid-throughput, the NextSeq. I guess, are you seeing a lengthening in the cell cycle there on the mid-throughput just given some of the budgets and is any of this also due to some of the increased competition that could be coming to the market?

Salli Schwartz

Yes, on both. So I think the mid-throughput side, I mentioned earlier, these cautious purchasing decisions. It’s taking people longer to make commitments and it’s taking them longer internally to work through approvals and budget processes that they might have. I mean that’s true even at Illumina. So it’s -- that part makes sense on the macro side.

Competition as well, I think, procurement departments generally speaking like to look at options if there are options and evaluate them. So we have been tracking very closely our win rate. And we mentioned during the second quarter earnings call, our win rate across this throughput actually accelerated in the second quarter versus the first quarter of this year. So it might take longer, but ultimately, we are still doing quite well.

John Sourbeer

And I guess, just can you also remind us, maybe even if you think about it just the NextSeq and mid-throughput, some of the pressures there and how that’s impacting customer budgets and consumables for the guidance for this year?

Salli Schwartz

Yeah. We have taken down, excuse me, our 550 pull-through figure, our average pull-through figure. It was $150, excuse me, $100,000 to $150,000 range and we pulled it down to $80,000 to $130,000. So that has come down. Part of that China, part of it is just there’s not the COVID surveillance-driven demand that we had historically seen.

On the 1K/2K, the NextSeq 1K/2K though, we held the pull-through range, it’s $120,000 to $170,000. So that’s continued to standup well, despite the fact that the increase -- despite the increases in the installed base. So the denominator continues to move up. We had 8% growth in the second quarter in NextSeq 1K/2K, despite that, the pull-through is holding up nicely. We were toward the lower end of that range in the second quarter though.

John Sourbeer

Thanks. And the company talked about bringing the XLEAP chemistry to the NextSeq next year. Just any thoughts or color on that and how that upgrade cycle could look?

Salli Schwartz

Yeah. That’s -- so no need to buy a new instrument. So that’s good. You can use your existing NextSeq 1K/2K, but you will have the ability to effectively download, I will call it. chemistry X and have some of the capabilities that the NovaSeq X offers customers. So there’s a lot of excitement around that. I do think that’s driven some of the sales that we have seen.

But in addition to chemistry X and some of the other offerings that NextSeq 1K/2K is unique in providing customers a dragon on board, the informatics and the analytics capabilities is something that our customers have been looking for and we are delivering on as part of our broader value proposition. So we expect to continue to see a nice backlog there and strong purchases and the rollout of chemistry X on the NextSeq 1K/2K is first half of next year.

John Sourbeer

Thanks. And Salli, you kind of touched on a little bit, but I guess, if you go back to the NovaSeq X launch and the 6K, you saw a little bit of change, maybe some pause in the ordering patterns there, but this is more of an upgrades and a brand-new instrument. So it sounds like you are not anticipating any shift or changes in backlog from what you see right now?

Salli Schwartz

No. Well, I mean, we may see people bleed down or run down some of their consumables to be able to switch up to the new consumables, but they don’t have to switch the instruments and so that’s a more contained transition, I will say.

John Sourbeer

And maybe switching now to margins. The company has announced some cost savings plans. And just how do we think about the different components there and maybe even an R&D run rate now with the cuts you are making?

Salli Schwartz

Yeah. So the expense cuts, I mean, we are doing the same thing a lot of our customers are doing. It’s the sort of environment where you prudent to do such things. So the way we approach the expense cuts was to look at projects or initiatives that either could be downsized, could be delayed or just didn’t perhaps make the cut to get done.

And then looked across the functions to be able to say, all right, well, what does that mean we don’t have to spend and that’s translated to headcount reductions in some case. You saw us announce a few of those over the last year and other costs around vendor spend, travel and so forth that are associated with those initiatives.

One big piece that we are still working through is on the real estate side. So we have relooked our global real estate footprint, we have been rationalizing what we have and we will have more announcements there just in terms of amounts and the impact to the P&L as we get those things done.

But it’s been pretty broad-based, including R&D. R&D though remains a key point of commitment for the company. We have -- we are an innovation-oriented company. I know a lot of companies say that, but that has been the hallmark of what we do and who we are and we -- it has allowed us to drive the industry forward. So I think you will still see significant dollars going to R&D and growth in that budget, but we have got to be disciplined about the spend, which is something we are pushing hard to do as well.

John Sourbeer

And at the Investor Day last fall, you gave some targets on both margins and for core Illumina revenue growth and on the earnings call you reiterated that 25% margin target. I guess how do you view the achievability of that target and then maybe long-term, where are the opportunities, where you think you can see advantages on margins going forward?

Salli Schwartz

Yeah. So I know Joydeep mentioned, I refer to it as more of a stretch and I think that, I mean, that makes sense by definition before we had 300 basis points of a gap from 2022 to 2025 to cover off. Now we have got 500. So purely from a numbers perspective, that’s 100% true.

We do have multiple levers to work at and we are pulling on all of them. So on the OpEx side, we talked about that and we see further opportunities to continue to fine tune our OpEx spend. On the gross margin side, there are opportunities that should translate as revenue terms and then also proactive things we are doing to manage the gross margin.

So on the first part, as we cover off more of our manufacturing cost base as we are ramping up the production of the X and all the consumables that go along with it, we are able to cover more of that fixed cost base and that certainly helps the gross margin and it’s been one of the reasons why the gross margin is lighter this year.

But then on top of that, as we ramp further into the consumables purchases, those are higher margin revenue. And so we should see a mix shift back towards higher margin revenue, which will also benefit the gross margin.

In addition to the actions that we are taking to continue to proactively manage down the cost that fit within our cost of goods sold. So lots of pieces there and lots of things to do to get that moved back up again.

And then obviously, the topline I think we are going to need to work through the rest of this year, see how the ramp takes shape, see where we are as we go into next year with the broader macro environment and customer sentiment.

But again, that’s what we are working towards, is the 25% for next year and then accelerating beyond that. As a company, we have been sort of in that 25% to 30% range historically and we think structurally, that’s a very reasonable place for us to be going forward.

John Sourbeer

And I guess, similarly, on the topline part of that guidance, the mid-teens growth. I think China is about 10% of your revenues. Obviously, there’s macro issues there, but also there’s been increased competition, maybe some pricing. I guess we put all these factors and the NovaSeq X launch, NextSeq on mid-throughput. How do you think about then that ramp just on the core Illumina to get to that mid-teens growth from where we are here?

Salli Schwartz

Yeah. I mean we -- the mid-teens still makes sense to us as the long-term structural growth of the company and when you look at it, all the things we presented at Investor Day around the target addressable markets and the size of those giant markets that are largely unpenetrated or very lightly penetrated. There’s opportunities to really accelerate into a number of different places.

I seriously doubt it will be entirely linear, but we are certainly putting in place all of the pieces to enable continued reimbursement, continued adoption, continued awareness amongst physicians and patients alike to be able to understand what genomics could do for them and the sort of the power of sequencing generally.

Then the analysis that Joydeep walked through is at Investor Day also for elasticity is another place that we see continued possibility where it’s not just about we have to go find more samples, sure, that will help. But we also are seeing increased interest in taking those samples through multiple different analyses and you hear lots of multi different pieces of multiomics from across our customer base and us. So lots of different analyses that can get done.

And then data, we are seeing some of our customers start to say, I am not going to just do whole exomes, I am going to do whole genomes or I am going to expand these panels. We are doing bigger panels now or forget about panels, we are going to go straight to PGP. So there’s -- or a liquid biopsy, you mentioned, it’s more intensive on the sequencing side. So all these things point to more elasticity, more use of the firepower that we have created, more enablement by the lower price points.

John Sourbeer

And I guess just on that point, liquid biopsy in clinical markets, just any additional color you are going to see there on just how these markets are coming online and how these could add to the long-term growth there?

Salli Schwartz

Yeah. The clinical side has been hard to get prepped to serve. It’s not something you just decide to do overnight and start calling on clinical customers and you are good to go. The transformation that the company has had to undertake in order to be prepared to really service those customers is taking years and quite a bit of investment.

But we are very well positioned to now to be accessing that whole customer base and we see the clinical markets as bigger and faster growing than research. And so for us, it made perfect sense over the long term to be able to have access to those broader markets and take advantage of the growth opportunities there. And there’s a nice feedback loop between research and clinical that we are certainly trying to fuel as well.

John Sourbeer

Yeah. And I guess, while we are talking on clinical, just any updates or feedback on the NovaSeq DX launch. I think China might have been a big market for that. So any impact there and just color you can provide?

Salli Schwartz

Yeah. So the NovaSeq DX has -- had a nice rollout. China was one piece, and certainly, that’s at some point of success and then other challenges like we were discussing. Europe has actually been a really important market, just broadly lots of specific countries there that have rules or requirements that the DX helps serve. So we have had a pretty nice rollout on that front and we will continue to selectively pick spots where we have DX instruments for those customers who need those specifically.

John Sourbeer

And one area I just wanted to touch on, there was an SEC investigation listed in the 10-Q that came out post the earnings call. Is the company providing just any comment on that or just more broadly any update on the various GRAIL investigations and timing on those?

Salli Schwartz

Sure. On the SEC, it’s not a whole lot to add to our disclosure in the 10-Q. It’s very early. So we received a letter in July requesting various documents. We are cooperating with the SEC to provide all the things that they have asked for.

I think we would observe that, given what we have been through as a company, a very public proxy fight, ongoing regulatory discussions, I will say, going on in multiple different countries and then the departure of our CEO earlier this year.

All of those things draw a lot of attention to what’s going on with the company and I think the SEC looking to understand all the moving parts. So we will have more to say over time, but for right now, pretty early.

And then on GRAIL, I won’t call them investigations, but with regard to the ongoing GRAIL processes, we will say, in the U.S., we have the appeal that we have now got in the Fifth Circuit Court in the U.S. We are expecting to get a decision from them by the end of this year. So we should know at that point whether we have been supported in progressing with the acquisition or whether we have to divest at least according to the U.S.

In the EU, we have -- we are paying most attention to a jurisdictional appeal that we have underway at the EU Court of Justice like the Supreme Court in the EU. We are supposed to get a decision there, either later this year or early next year and this is specifically on whether the EU has the jurisdiction to even review the transaction in the first.

So if we win that appeal, then the fine that you have probably read about that we recently had a sign to us that goes away. So that’s €432 million, which would go away, which is obviously something we are critically focused on. But also, importantly, we wouldn’t have to divest if we were going to, in accordance with any divestment order, we will be able to do a bit more flexibility in terms of what we do from there.

So in terms of a decision tree, if we lose one or both of these appeals, we will be divesting. We are not going to pursue anything any further at that point in terms of further appeals on our part. If we win both of them, then we have a decision to make, either we are going to keep the asset in some form or fashion or we are going to divest even though we could keep it.

And so our Board is committed as is our management team to relooking the asset if we get to that point and making a decision based on looking forward, what the business case is and the value that could be accrued, and if it’s in the best interest of shareholders, we will finish the deal, and if it isn’t, then we won’t, we will divest.

And one last piece on this, I know it’s a lot of moving parts, we are waiting still on a divestment order from the European Commission. Hopefully, we will receive it this quarter. We assume maybe September since August is more of a summer break. That will allow us to then start progressing with the divestment and start running down hopefully different paths to see what’s possible in the markets and with potential buyers. So we are prepared to get moving as we receive that.

John Sourbeer

Thanks. And maybe back to core Illumina here, a couple more questions just, I guess, maybe start off long-read market. Just how does that come up in the conversation, how do you see the short-read, long-read dynamics play out?

Salli Schwartz

Yeah. Not as often in the conversations, I would say, but an important part of the market. We see these two short-read and long-read that are complementary to one another. Short-read addresses most use cases and at a price point that’s unparalleled by long-read by quite a bit, as you know, I am sure.

But long-read is important as an offering, certainly, in niche or certain areas where it just -- it makes sense to us. So what we are working on is a long-read offering of our own that would be available on our existing instruments. So you wouldn’t need to go buy another instrument, you would be able to use what we are rolling out on our instruments for what you need it for and will be that.

So we had one offering that we rolled out and we announced in March of this year, we started to roll out in May. We will have an enrichment assay that we are coming out with very soon and that coupled with the 25B flow cell on the NovaSeq X gets you to a $600 total genome with long-reads. So that’s very exciting for some of our customers. We have got more than 40 of them right now that are doing evaluations and initial work and so far pretty encouraging on that front.

And our aim is whatever our customers need, we want to be able to deliver it on our instruments. So whether it’s front end ease-of-use and easier sample prep, especially for clinical customers or whether it’s back-end informatics, analytics, data storage, data losses compression and all the data management tools that we increasingly need, there’s long-read, we want to be able to -- you don’t have to go buy new instruments or new tools for all these things, all built into our systems.

John Sourbeer

Thanks. Yeah. And I appreciate that on, I think, 40 customers, as you said, that they took long-read. Just any additional feedback there from those customers that have started to receive the kits since May and how do you think about just the broader opportunity of the end customer set that’s out there for these products?

Salli Schwartz

So early good feedback. Obviously, this initial product is not the full enrichment assay and the 25B flow, so those are coming. So we expect the enthusiasm to ramp on this. It’s -- I think it’s an incremental offering. So we don’t see, generally speaking, long-read is a replacement to short-read, but again, more as a complement. So it will be a nice revenue addition. But again, more of a complement than a replacement.

John Sourbeer

Thanks. And I guess there’s quite a few population sequencing programs out there. I don’t think it came up on the earnings call, but have you seen any of the macro headwinds impact these programs and just any new programs or other updates…

Salli Schwartz

Yeah.

John Sourbeer

… on this?

Salli Schwartz

We continue to track. We have got a portfolio of 30 something different PopSeq programs -- projects that are underway and some finish, new ones get added. There’s actually some very large programs. The X has enabled in certain countries that we hope to be adding very soon. So that will be exciting.

No big, big ones to know. I know in the past, we have had some very large ones, but it’s -- we have got a diversified set. There has been an impact of the macro to some of the -- both the purchasing, as well as even inflation has stretched some of those budgets in terms of what can get done and sample gathering has been an issue at times.

But we built that into the way we have looked at the year and if it’s intensified, we have reflected it in our revised guidance. Overall, the PopSeq programs as a whole portfolio are less than 5% of our revenue. So, in and of itself, it’s important but not a huge piece of the revenue base.

John Sourbeer

Great. Well, thanks for that. With that, we are right here at the time. Salli, I really appreciate you joining us today and thanks for everyone in the audience for listening.

Salli Schwartz

Yeah. Thank you.