I think we'll go ahead and get started. I'm Rob Mason, the senior analyst at Baird, covering the advanced industrial equipment sector, as well as coverage of Zebra Technologies. Zebra is a global leader in enterprise asset intelligence and a provider of tools to enable companies to digitize operations and transform their workflows. Very pleased to have with us from Zebra today, Bill Burns, CEO, who is going to open with maybe just a couple of comments, or we could jump-
I can do that.
right into the questions.
Yeah. Yeah, thanks, Rob. Zebra's focus really is our vision of Enterprise Asset Intelligence, as you said, really, that talks about the idea that we look to digitize and automate customers' environments. And, you know, the way we do that is providing, you know, every asset and worker on the edge, allow them to be visible, connected, and optimally utilized within the environment. So, you know, if you can digitize an asset, if you can know where a worker is with a mobile device, then ultimately you can optimize your workflows within the environment. About 86% of the Fortune 500 are our customers today across hardware, software. You see us in everyday life, so, you know, devices used at checkout scanners in retail. You see us, our mobile devices used with parcel delivery inside transportation and logistics.
You see our hospital wristbands printed inside hospitals. And our most recent investments beyond, you know, our core areas have been in robotics, AI, retail software, and then in machine vision. Fixed Industrial Scanning is the latest investments. I'd say, you know, difficult year from a demand perspective, as we're coming off really the highs of COVID and ultimately the, you know, demand driven by e-commerce and parcel delivery during COVID, and now we're seeing those declines impact our business in 2023. So difficult environment at the moment, but the future's bright as our customers continue to look to digitize and automate their environments, get more visibility, smarter supply chains, better visibility into inventory and retail, more connected associates, and more visibility to assets across their environment.
Yep. Yep. You know, like you noted, I think everybody's aware, we revenues have been under some pressure as we traverse through the year.
Yep.
But during the third quarter, it looked like, you know, perhaps there's some stabilization there. Are you comfortable, you know, at this point, saying, you know, based on replacement, new project activity that you are seeing come through, are you comfortable saying markets are at or near a bottom at this point?
Yeah, we've used the word leveling, you know, have, have leveled off. I think that we saw, you know, broad-based declines starting in the beginning of Q2 and, and going into Q3. Now, we've seen end user demand, you know, leveling overall. I think that, you know, typically in fourth quarter, we'd see more year-end spend by our customers. We haven't quite seen that or aren't planning that for, for Q1, and I think we've got tough comp- compares going into the first half of 2024. But I would say leveling, bottoming, you, you can use those words. That's how we see it. It's also the peak of a, our distributors kind of destocking in Q3 as well. So this phenomena of destocking is demand goes down or distributors hold less inventory ultimately.
So it's not like they had too much stock, but as demand drops, they just put less in stock as they think of holding about 60 days of inventory in stock. We saw about $140 million in that destocking in Q3. We're forecasting about $100 million in Q4. That kind of goes away into 2024. So bottoming, leveling, yes, both on end user demand kind of leveling out, and then ultimately the peak of destocking within our distributors coming out of Q3 and Q4.
And as you think about, again, in this bottoming process, certainly around maybe replacement activity as well, what insights can you glean from the field in terms of how your products are being utilized, underutilized? They give you, again, some more-
Yeah.
comfort around that.
Yeah, I think that, you know, we saw this, you know, significant uptick in revenue in 2021 and 2022 by our customers, really to meet the demands of e-commerce, buy online, pickup in store, parcel delivery, all the places that are our largest customers. You know, manufacturing, T&L, are our two largest segments, healthcare and manufacturing, and government are the smallest segment overall. So those customers bought a lot, you know, during 2021 and 2022, and what they're using is that capacity being used off now. So it's not as much they have excess devices sitting around somewhere. You know, the largest e-commerce supplier in North America really, you know, said to kind of across all vendors, "I've got extra capacity and extra, you know, equipment. I don't need more for a while," and we've seen that behavior.
Most others are using the devices they have, you know, from us today. They just don't need more. The idea of a service-based economy versus a goods-based economy, they have, you know, don't have a lot of confidence in their top line of their business, so they're holding off from a capital perspective. They're sweating assets a little bit more. They can do that with our devices as well, and we're seeing that happen. It's predominantly using the capacity they have. We can tell through managed services software, where we manage devices for our customers, but those devices are pretty much being used. Our number of installed devices that will eventually be upgraded again over time is increased significantly because of this increased demand in 2021 and 2022, and eventually, that's good for our business longer term.
We're talking millions of devices-
That's right.
in this installed base as well.
That's right.
Yep. Okay. Maybe just, you know, is there any distinctions you would make regionally? It seemed like Europe was a little bit softer, or at least from a comp standpoint.
Yep.
But any distinctions you would make regionally across your-
I would say, you know, broad-based demand it started more in our larger customers, which then impacts more of North America first. You know, typically, Europe saw more in Q3, more distributor destocking than the other regions. I think that's predominantly as we got into Q2, we saw, you know, kind of mid-tier business and then run rate business kind of catching up in the slowdown, I guess I'll call it, to large deals, which is more North America-focused. So nothing really different across Europe and North America. Only timing's a bit different on when we're seeing things kind of slow down. We believe ultimately, large deals and large customers will come back first, so it, it'll reverse the other direction, and then mid-tier run rate will follow, is how we see it.
To the extent customers have clearly slowed what they're willing to spend, have they, have you seen that slow in terms of what's entering the project funnel? Does that need to pick up again before we see spend flow through or?
Yeah, typically, you know-
Like-
We talked about this kind of in the first quarter call and in the second quarter. I think that the good example is our sales teams typically have about six months visibility to large projects when our customers are pretty confident around those. They're put in their sales funnel is kind of secure, and they go happen, right? This year, we just didn't—it turns out that they didn't have the confidence in those as we got into the year, that customers started saying: "Hey, my CapEx budget was, you know, pulled back. I just don't have the money to spend on that project. I still ultimately believe in it. I'm going to go push it out, but I can't tell you when." So I think we see. You know, we don't see orders being canceled.
We see projects that customers plan being pushed out, and the visibility today is still challenging as we look out in the future. We know that there's refresh opportunities that our customers have coming up, they had in 2023, that they've pushed out. There's more in 2024 that will come up. Could they sweat those assets a bit longer, especially in mobile devices? Sure. That timeframe typically is 12-18 months. You know, service contracts go up in cost because ultimately we charge them more because those devices are older. Those devices get broken, they want, you know, new security patches, they have new OSs, they have new applications that require faster processing speed, more memory. You know, all those things drive them to refresh and upgrade those devices. But can they hold off in a short term? Yes.
Have they been holding off on those projects? Yes, both refreshes and new projects for the moment, you know, as their budgets are challenged, but those will come back in, and they'll buy those projects again because they have solid ROIs and use cases for our products.
Yeah. In terms of just inbound projects into the funnel that maybe they don't flow through, on the-
Yeah
... normal timeline, how is that activity such that projects are getting teed up for when-
Yeah, I would say-
Budgets are ready.
... we're. We still have a lot of conversations with customers today on, you know, what's their, their future plans. I think there's less things entering the funnel, right? I think that that's been the challenge we had in Q2, is that, you know, there wasn't many opportunities. As they grow through the funnel, typically, if a secure opportunity doesn't happen, then you drop down to the next tier in your funnel, and you can replace it with something else. Those opportunities, just there's not that many opportunities to do that, you know, in the short term. So I'd say less entering the funnel. We'd like to see more.
We'd have liked to see more year-end spending, but, you know, intentionally, we didn't call that in the number because we just haven't seen enough changes in the environment to have confidence that, you know, the market's in a different place than it was kind of in Q3 and Q4. And, you know, we clearly see, you know, the back half of next year leads to easier comps, but the first half of the year, you know, we grew in first quarter, you know, in 2023. So, you know, tough compare, you know, in the first quarter.
Is it fair to say that most of your customers go into the new calendar year, you know, perhaps with a new capital budget?
That's right.
That budget probably is not finalized on January 1. They go through that process.
Right.
During the quarter as well?
Yeah. So many of the retailers, you know, their year-end is the end of January, right? U.S. retailers, example, typically our customers have their budget set in Q1, and we typically have visibility then to what they're going to spend in Q1, what their plans are, at least Q2, and for the remainder of the year, the projects they have in front of us. Those projects didn't go through in 2023.
Yeah.
You know, we expect that if there's some confidence in, you know, their end business, and they've only could hold off so long, that we expect clearly, you know, a pickup in business in 2024 as they move ahead with some of those projects, as we see some of these refreshes moving forward. So, there's lots of opportunities out there. Our customers are still buying from us. They're just not buying in the levels they were in the past.
Yeah. And maybe just one last point around this topic. Just as you think about replacement cycles in general, you mentioned they could push out-
Yeah
... 12-18 months. Is there any sense when this big or, you know, larger surge of devices went into the market in 2021, that some of the older, maybe they weren't quite ready to be... Did they get replaced, or are those-
Yeah, there's-
-still working their way through?
You know, every customer is on a different cycle, and even within a customer base, you think of different applications and different cycles. So, you know, front of store retail and a large retailer is in a totally different cycle than, think of distribution center and their transportation networks. Think of transportation logistics inside the four walls compared to, you know, their drivers themselves, and then you have contract drivers, you know, many times inside T&L as well. So they're all on varying different degrees of refresh cycle. Even when they refresh, they refresh in large quantities, but then they continue to buy. They, they add additional devices, they break devices, they lose devices, those kind of things through the cycle. So typically, an upgrade, you know, four years ago, turns into a much larger upgrade four to five years later.
That's typically the refresh cycle across our products. Printing's may be a little bit longer, mobile computing, a little bit less, but they can only hold off so long. And, and we know when our largest customers are going to refresh those devices, they're all on different cycles. We track those, work with them. We know that a couple of ways. One is we know when they refreshed last time, we know how many devices they bought. They're typically under service contract with us, so now we're working with them on, "Okay, if you want to extend that service contract for a year, it costs you a bit more. Are you sure you don't want to refresh?
These are benefits you get from it, you know, and, you know, do we want to go do that sooner?" So it's all about them having the capital to go and do it. What's the timeframe of that rollout, and then ultimately, what are they getting for it? Faster speeds, you know, memory, security, all the things they care about. And the devices just get beat up. I mean, they're used for... Think of even a rugged mobile device used in an environment for 4-5 years. That's a tough environment in most work instances.
Right. Right. You know, but maybe zoom out a little bit. You've been in the CEO position not quite a year, obviously.
Yeah.
But you previously had the ability to influence strategy as well at Zebra. So, I'm just curious, you know, as we go forward, you know, what should investors consider about any perhaps shift in influences... you know, we've gone through a lot of challenges-
Yeah.
Broadly, but just around strategy as we go forward.
I mean, we feel good about the, you know, our core business. You know, we've typically said that, you know, through cycle, we would see 5%-7% growth through cycle. We still feel good about that. Ultimately, our core markets are, you know, printers, scanners, mobile computing devices are, you know, market leading across each one of those segments. And that there's still opportunity for us to continue to take share across those markets because we have differing share across the vertical markets we serve: retail, transportation, logistics, manufacturing, healthcare. I talked about before in different places around the world, and we still see growth in those markets in places we can continue to take share. So we think of that as kind of 4%-5% growth across our core.
We think of the strategy of our adjacencies that, you know, ultimately, tablets, bioptics, scanning, supplies, RFIDs, adjacencies to our core, and they typically grow, you know, low double-digit, you know, kind of growth. And then we've got these new areas we've invested in across robotics and retail software and machine vision. All would be much higher growth rates, but off a much smaller base. So we married all those together, and we think the strategy is sound.
That we think we have the right investments in the area with the, you know, to service our customer, leverage our installed base, leverage our trusted relationships with our customers around the globe to enter new markets, such as machine vision and software, leveraging those devices, ultimately, robotics, to work along with workers that have mobile devices, that are equipped with those today, so cobots working with workers. So we think a lot about what are the adjacencies in the areas we want to enter? How do we leverage our core markets, where we have strength and strong customer relationships, and how do we take those and leverage those into new areas for Zebra? And we feel good about the strategy we've had in place, and we'll continue on that path 'cause, you know, we'll see the business return to growth.
This long-term trend of digitizing and automating environments and giving assets a digital voice and having visibility across the entire supply chain, you know, and continue to upgrade people's workflows to become more effective and more efficient, is what we do, and our customers need that.
Has this cycle that we're going through right now, this down cycle, has it caused Zebra to think differently about how it approaches recurring revenue or the amount of, recurring revenues that would be, you know, appropriate in this portfolio, which-
Yeah. I mean, you know, everyone like to have more recurring revenue. I think our, our core products around mobile computing, printing and scanning will be our core products for some time and the majority of our revenue, just because we believe they'll continue to grow, so it's the largest predominance of revenue. You know, we think of recurring revenue in a couple of areas. Our services business is really a recurring revenue, multi-year contracts on our mobile devices and, and our... and that business is growing and continue to improve, you know, gross margin in services. Our software business leverages the mobile device, so think of the retail associate using our mobile device and communication, collaboration software, task management, workforce management, are all the software assets we have. Those are true SaaS recurring revenue.
We think of our supplies business as recurring revenue with our printing devices because those orders continue to come in, even though they're multi-year contracts for supplies, so that's recurring as well. So we'd always like to have more recurring revenue. Robotics is sold in a revenue, recurring revenue, in the idea that, you know, people are leasing robots for a, you know, a three-year period 'cause the customer base is predominantly 3PL, that have multiple year contracts with their customers, so that's recurring. We'd love to have more recurring revenue. We focus on it all the time, but the predominance of our business, you know, will be printing, scanning, mobile computing and devices for some time.
So around these adjacent and expansion areas that you know you've outlined, the ones that you know you would expect to grow potentially double digits. You've added market positions, as you said, around machine vision, robotics, the added to the software. They've had stronger uptake in tablets. Which one of those stands out as you know in this type of environment, which is challenging-
Yeah
... is having better opportunity to kind of grow through some of the end market headwinds?
I would say, if, you know, if you look at market size, our machine vision and fixed industrial scanning, you know, portfolio, which is about $100 million-ish today, is the place that has the biggest market potential, right? We address about $3 billion of that market. You know, TAM today, we're only, you know, $100+ million in revenue. The market's fairly fragmented. There are strong competitors in that market as we know, but we've been able to win opportunities. That's a growing market. You know, we've seen a pullback in semiconductor in the short term, but I think other areas will continue to grow long term as there's opportunities across fixed industrial scanning, inside transportation, logistics and warehousing, and really, machine vision inside manufacturing, which we see as an opportunity for Zebra.
The manufacturing floor continues to be more automated, things like machine vision. We're seeing opportunities for tablets on the manufacturing floor, as opposed to fixed infrastructure and screens. We're seeing robotics for line-side replenishment, so that's an attractive market to us in general manufacturing. But I'd say, you know, the most attractive from a market size perspective is machine vision. We continue to take share in tablets. That's another use case closely adjacent to mobile devices. A lot of use cases, we call it bigger screens. So if you're a manager in a retail store, you want a larger screen format, not just a mobile device.
If you're on the production floor, but we're seeing, as I mentioned, this idea of moving from fixed infrastructure screens to, you know, production workers having tablets so they can communicate, collaborate, you know, be able to use guides to... you know, as production is down or something happens in a production line, a worker kind of assistant kinds of things. So more communication, the way we've seen in retail happening in manufacturing. So we think of these as all adjacent to what we do with lower share, which then creates an opportunity across all of them to, to be, you know, to continue to, to grow our business. The largest market is probably Machine Vision.
... And the source of the share gains in tablets is your legacy position in mobile computing. You're already there, they just want an extension or is it?
Yeah, and a shift to Android.
Okay.
So we're seeing a shift in the tablet area that was really focused on more PC, Windows-based. We're seeing a lot of our customers saying: "Okay, you know, just like my mobile devices, I'd like my tablets to be on Android, and then use the applications across Android inside, you know, inside those environments.
Mm-hmm. And then within the, the machine vision or fixed industrial scanning, is there a way to differentiate the growth trajectory right now on those? Machine vision, I thought, was a little, like you said, a little more, maybe a little more semiconductor exposed.
Yeah.
Is it Fixed Industrial Scanning seeing better?
Yeah, I mean, we've had. We entered that marketplace in kind of three different areas. One was organic investment in Fixed Industrial Scanning. So think of it as taking a handheld scanner and making it a fixed, you know, device or unit. There's some software changes 'cause it's faster barcode reads over conveyance and things than a handheld scanner, but it pretty much is reading a barcode, and we entered that market organically. And then we married to that, the next step up in that is think of a smart camera. So it can read barcodes, but also it can do some vision system. It can read optical character recognition. They actually read text, right?
It can, you know, do some inspection, and we did an acquisition of to add software, Adaptive Vision, to that in the kind of the middle of the market. And then we did an acquisition of Matrox in the very high end of the market. So think of very high-end, you know, vision systems that are doing things like semiconductor. They're doing multiple camera images together, pulling all those together and doing inspections, so the very high end of the market. So we've got, you know, pretty full portfolio of products today across from low end of barcode reading all the way to the very, you know, high end of the market.
I think we've got, we believe, ease of use, a portfolio where you can upgrade from, you know, a low-end fixed industrial scanner to a smart camera, and then ultimately, you know, leverage our, our broader vision systems. So we feel good about the portfolio overall. Semiconductor, we knew when we acquired Matrox, was heavily customer base was in the semiconductor area. We had hoped we'd have a bit longer before the semiconductor market declined to diversify that business, but we've worked hard to diversify it outside of semiconductor, and that's what we're continuing to do today, and we see opportunities in electric vehicle manufacturing. There's a lot of inspection around things like battery and others, pharmaceutical, food and beverage. A lot of spending still happening to upgrade production lines.
They're kind of longer-term projects and not held back as much as other areas, you know, today across our customer environment. So we're excited about the machine vision market. We're excited about the portfolio we have. We have very low share today. We have formidable competitors, but the market's fragmented-
Mm-hmm.
We think there's an opportunity for us to leverage our install base of the rest of what we do across our customer base and grow our machine vision and fixed industrial scanning market. Those same T&L customers are buying fixed industrial scanning from someone else today, and we want them to buy from us inside manufacturing. We've got a strong position inside distribution and warehouse. We want to have a stronger position on the manufacturing line. We have that today in scanning and printing, not as much on the mobile computing, 'cause they're not used as much, but we are used in the distribution, so how do we leverage that to do more machine vision and manufacturing?
Just with respect to Machine Vision or Fixed Industrial Scanning, AI deep learning tools have become, you know, more germane to that-
Yep
... in that market to help integrate those products. What inning is Zebra in, in terms of being able to integrate those type of capabilities into the-
Yeah. So, I mean, today, across the product portfolio, I'll use traditional AI as the, as the example, you know, is being used for things like machine learning and others across the portfolio. So we use that today in things like optical character recognition, in robotics navigation, across our machine vision portfolio. That's an important piece of what we do. We use it in our planning software, our Antuit.ai software offering, which really allows for demand planning, and then we leverage demand planning into execution. So if you ordered the products, did they get put out on the shelf? So you tie execution back to planning. So traditional AI is used throughout the portfolio. We're excited about the idea of using generative AI on our mobile devices.
So we recently made an announcement along with Qualcomm, where we can actually run models natively, generative AI models, on the device without connecting back to the cloud. So the idea of that is that many of our retail customers, many of these warehouses don't have a lot of connectivity back to the cloud, and expensive if I got to go back to the cloud every time to be able to run, you know, a generative AI model. But if I can run it on the mobile device locally, and I can have it as a copilot to anybody using a mobile device, that can look up, "What do I do when I get, you know, a store return without a receipt? What do I do when production, you know, goes out of alignment?
What do I do in a retail store if, you know, I've got to go, fill the stock, where is it within the store? Hey, what happens when, you know, it's the holiday weekend, I'm out of strawberries? What's the best practice for a produce manager to go, you know, get additional strawberries quickly back in the store? Anything that would be leveraging a copilot with a worker, and if I can do it locally, I can do it much faster, and I can do it at lower cost. And we think that's a, you know, a huge accomplishment working with Qualcomm and, and announcing that over the last couple of weeks.
... I did have one question from the audience we'll work in, and it's around your mobile devices. Just, you know, in terms of what customers are looking for most, is it around batteries, around security? I guess, what are the features that drive them to that device the most right now?
Yeah, I mean, it's all the above. I mean, first and foremost, you know, the high-quality hardware and software is what our customers are looking for is from us. They're rugged mobile devices. They, you know, have a scan engine, so they're purpose-built for scanning within our customers' environments. They have accessories that allow them to do things like read RFID, you know, tags and others. They, you know, look for us to provide long lifecycle devices, so we work with Qualcomm and Google to get the front end of a chipset and longer-life chipsets.
We do the same thing with the front end of OS releases because these, you know, unlike a consumer device that changes in the marketplace every year or two, our customers want to use those for 5 years, buy the same device, upgrade the OS, be able to get security patches on those devices for 4-5 years. Those all are really important to our customers overall. Our service agreement, our service and support we provide them, is also critical to their environments. Ultimately, these are mission-critical in what they do. They're picking orders, they're supplying inventory, they're servicing their customers, you know, and ultimately, they expect that from Zebra.
So it's all the above, and I would say, you know, as well as being the market leader across the areas in which we, you know, engage our customers, make us more a trusted advisor in our customer's environment, where we lay out things like our Modern Store initiative, where we talk about what the future of retail looks like. What does it look like to have an engaged associate with our mobile devices and our software? What does it look like to have better inventory accuracy in your store and your distribution center, and how do you maintain that in a you know, a better way to always know what you have on the store floor?
How do you engage your customers in a different way, using a mobile device for things like payment or being able to order something online if they don't have it in the store? So we think of it just a different conversation we have with our customers, even above the device, being a trusted advisor to them because we are the market leader.
Mm-hmm. Just to return back to the machine vision portion of the portfolio, again, because you outlined that may be where you have the most market runway. How would you describe the completeness of the portfolio today, as well as your maybe the maturity of the go-to-market strategy there, between distribution as well as your direct effort?
Yeah, I think that, you know, as I talked about the portfolio before, kind of low end, fixed industrial scanning, smart camera, all the way to the high end of the portfolio, I think we've got a pretty good portfolio of products that we can, you know, have offerings to our channel partners and then ultimately end customers. So we feel good about the portfolio. Could it be more broad? Could it be more expansive? Sure. But we've just entered this market, you know, a year, year and a half ago, through organic and investment. I think go-to-market, we have work to do, right? Ultimately, you know, building out our channel partners in this area, continue to build relationships. We've got overlay sales teams that leverage the relationships of our broader sales teams into our T&L and manufacturing customers today. You know, those are smaller teams today.
You know, in the Matrox acquisition, they were a very small sales team, right, with a private business, and ultimately, we've expanded those sales teams and channel partners, but more work to do. That's the biggest opportunity for us, is to literally see more opportunities, see more customers, and be more visible to our customers in these offerings across machine vision and Fixed Industrial Scanning, and leverage the customer relationships we have today into new buying personas, to know and ultimately consider our products compared to, you know, our competitors. So that's the biggest opportunity, is go-to-market for us.
Mm-hmm. Maybe somewhat relatedly, I'll just throw this out there because there was an announcement yesterday, just Chief Revenue Officer is transitioning-
Yeah.
to an employee that's been with the company a long time and coming over from Europe, I think.
That's right.
Just, you know, any takeaways we should have from that announcement?
Yeah, just, you know, Richard Hudson's a, a great leader. He's led our European sales team for the last seven years or so. He led Northern Europe before that. He was in the forefront of the transition to, you know, Android and, and one of the, the early... I think it was the biggest win in the, you know, the history of the company at the time with, with Royal Mail transitioning to, to, to Android. And is a strong channel leader as well. So, you know, even more of our business in, in Europe is channel-led as opposed to, you know, direct, but has been certainly a leader that's led both, direct customer relationships, large deal, as well as understands our channel. He's well-respected, you know, throughout the region and, and the company. He's the right choice to, to lead our go-to-market moving forward.
As you think about, you know, kind of other efforts that you would like to add investment into, sounds like maybe machine vision is one.
Yeah.
You've also taken about $100 million of cost out this year.
Right.
How should we think about the reallocation of resources going forward here?
Yeah, we continue to look across the portfolio and say, you know, in our customer base, both vertical markets and geographies, and say: Are there opportunities to accelerate revenue? Because we've got to sell our way out of this. You can't save your way out, right? But we got to be, you know, cost-conscious in the short term. As you said, we've got $100 million in, you know, run rate. We've taken cost out into 2024 as we saw the declines in Q2. We've taken decisive actions around cost. We continue to be cautious around the cost base, but the, you know, a lot of focus from the executive team on how do we drive more revenue? What are the customers who are going to buy? What are the opportunities for us to enter new markets?
How do we drive market share in places where we have lower market share? So that's our, our primary focus, is how to return to revenue growth. That's really what we need to go do.
Excellent. Well, we need to pause there. There is a breakout room-