金山雲 (KC) 2026 年第二季法說會：AI 營收成長帶動首度實現經調整營業利潤

金山雲 (NASDAQ: KC) 發布創紀錄的單季營收，主要受惠於 AI 雲端需求加速，且經調整後營業利潤首次轉正。管理層同時維持全年資本支出的基本預測，並持續擴充 AI 算力。

重要高光

• 受到 AI 雲端需求推動，2026 財年第二季營收達人民幣 30.7 億元，創下歷史新高，年增 31%。
• AI 雲端毛帳單金額年增 82% 至人民幣 13.3 億元，占公有雲營收的 56%，占總營收比重超過 43%。
• 經調整後毛利率升至 15.4%，季增 2.4 個百分點，年增 0.5 個百分點。
• 經調整後營業利潤達人民幣 1.24 億元，營業利潤率達創紀錄的 4.0%。這是該公司首次實現經調整後營業利潤轉正。
• 公有雲營收年增 45% 至人民幣 23.6 億元。MaaS（模型即服務）營收較 2026 財年第一季成長超過 12 倍。
• 本季度 AI 基礎設施投資（包含資本支出、使用權資產及融資租賃）達到人民幣 33 億元。

關鍵財務數據

業務與營運表現

AI 雲端仍是金山雲的核心成長引擎。公司表示，其 AI 雲端客戶群已涵蓋網際網路服務、AI 實驗室、具身智慧（embodied AI）、自動駕駛、科學 AI（AI for Science）、金融科技、遊戲及線上影音。管理層指出，此多樣化布局有助於更靈活地配置算力資源，並帶來更強的定價能力。

來自小米及金山生態系的營收達人民幣 8.1 億元，年增 28%，占總營收的 26%。上半年來自該生態系的公有雲營收成長 54%。股東亦批准提高與小米的關聯交易上限，將 2026 年與 2027 年的合計上限提升至人民幣 100 億元。

金山雲的 MaaS 平台已支援 120 個模型，並服務超過 230 家企業客戶。管理層將該業務的快速成長歸因於高效能中國開源模型的普及，以及 AI Agent（智慧代理）應用場景的擴展。

公司還推出了 Agent 開發套件，涵蓋安全沙盒環境、知識與記憶管理、評估與治理等功能。同時升級其訓練與推理平台，以提升資源排程、利用率及模型部署效率。

企業雲營收達人民幣 7.1 億元。管理層表示，不應將近期的成長線性外推，因為交付與營收認列通常集中在下半年。此外，公司正將部分專案型業務轉向營運型模式，這可能會被歸類為公有雲營收。

管理層指引

管理層維持全年的資本支出基本預測。2026 財年上半年包含使用權資產及融資租賃在內的投資達人民幣 62 億元，已占 2025 全年可比投資規模的 75% 以上。

公司計劃持續投資 AI 基礎設施，同時提升算力資產利用率、獲利能力及現金產生能力。管理層強調，投資決策仍將以需求為導向，並著重於資本效率。

風險與觀察重點

• 管理層認為 AI 晶片供應緊張是產業的長期現象。金山雲正透過分散供應商以及提高對中國國產晶片的相容性來應對。
• MaaS 的經濟效益可能會隨 Token 價格、新模型發布、客戶的模型偏好及營運效率而波動。
• 企業雲專案的時程仍對客戶預算變化高度敏感，特別是國營企業與政府機構。
• AI 基礎設施採購集中於少數大型專案，這可能導致每月與每季的資本支出呈現較大波動。
• 持續擴充 AI 算力會增加折舊成本，需要維持高利用率才能支持投入資本報酬率（ROIC）。

分析師問答焦點

管理層表示，算力服務與 MaaS 具有不同的風險與報酬特性。算力合約通常透過長期合約提供較高的利用率能見度；而 MaaS 雖能提供更好的獲利空間，但較易受 Token 定價、模型更迭及營運效率影響。因此，資源配置將在這兩種模式之間進行動態調整。

在競爭定位方面，管理層強調金山雲作為中立雲端服務商的角色，沒有需要優先推廣的自研模型。公司可依客戶偏好提供模型，同時利用自身的算力與基礎設施能力來支撐毛利率及服務可靠性。

關於定價，管理層表示儲存與算力服務的調漲已普遍獲客戶接受。在某些情況下，公司不僅能轉嫁成本上升，還能提升獲利能力。公司亦在積極尋求更多輕資產的託管服務專案。

管理層未提供 MaaS 與算力服務各自的投入資本報酬率（ROIC）數據，因為報酬率因專案、回收期確定性、毛利率、固定資產與折舊政策而異。不過管理層表示，隨著營運槓桿改善及固定成本攤銷，整體 ROIC 正逐步回升。

法人說明會完整逐字稿

完整財報電話會議逐字稿

管理層陳述

Operator

Good morning, ladies and gentlemen, and thank you for standing by for Kingsoft Cloud's Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note that today's call is being recorded. I will now turn the call over to Mr. Jackie Zou, Senior Director of Capital Markets at Kingsoft Cloud. Jackie, please go ahead.

Unknown Executive

Thank you, operator. Hello, everyone, and thank you for joining us today. Kingsoft Cloud's Second Quarter 2026 earnings release was issued earlier today and is available on our IR website and DuoReswire. Joining us today are Ms. Zou Tao, Chairman and CEO; Ms. Yi Li, CFO, Mr. Liu Tao, Senior Vice President; Mr. Ken Kayan, Senior Vice President; Mr. Yu Jung, Vice President Mr. Joe Rio, Batumi Vice President; and Mr. Clark Ken, Board Secretary and Associate Vice President.

Mr. Zou will discuss our business performance and key developments followed by Ms. Li with a review of our financial results. Management will then take your questions. Consecutive interpretation will be provided for convenience and for reference only.

In the event of APs prudency, management statements in the original language will prevail. Before we begin, I would like to remind you that today's call contains forward-looking statements made under the safe harbor provisions of U.S. Private Securities Litigation Reform tax of [indiscernible]. These statements involve risks and uncertainties and actual results may differ materially from those expressed or implied by the forward-looking statements. Additional information concerning factors that could cause actual results to differ materially is included in the company's filings with the U.S. SEC. The company undertakes no obligation to update any forward-looking statements, except as required by [indiscernible] Unless otherwise stated, all financial figures discussed on today's call are denominated in renminbi.

With that, it is my pleasure to turn the call over to our Chairman and CEO, Mr. Zou. Mr. Zou, please go ahead.

Tao Zou

[Interpreted]

Hello, everyone, and welcome to Kingsoft Cloud's Second Quarter 2026 Earnings Call. I am Zou Tao, CEO of Kingsoft Cloud. This quarter, we saw further evolution in the AI cloud market, the rapid growth of the open source model ecosystem is creating significant opportunities for neutral cloud providers. At the same time, our long-held mission of bringing AI to every industry becoming a reality through a combination of model as service, agent as service and FTE services.

Against this backdrop, Kingsoft Cloud remains committed to technology leadership and high-quality sustainable growth. We are accelerating the development of our AI cloud mass and FTE businesses with encouraging progress. First, AI continues to drive strong revenue growth. Total revenue reached a record of RMB 3.07 billion, up 31% year-over-year. AI cloud gross billings increased 82% to RMB 1.33 billion and accounted for 56% of public cloud revenue.

Mass revenue also rose strongly with Q2 revenue up more than 12x from the Q1 level. Second, profitability improved significantly. Adjusted gross margin rose to 15.4%, up 2.4 percentage points quarter-over-quarter. Operating profit turned positive for the first time with adjusted operating margin reaching a record high of 4.0%. This reflects our continued efforts to capture AI opportunities, improve revenue quality and drive greater operating efficiency.

Third, our customer mix continued to improve with stronger momentum both within and outside our ecosystem. Revenue from the [indiscernible] Kingsoft ecosystem reached RMB 810 million, up 28% year-over-year and accounting for 26% of total revenue. Revenue from our top 5 nonecosystem customers grew 51%.

Our AI cloud business now serves a broad range of sectors, including internet services, front care AI labs, embody AI, autonomous driving, AI foci, Fintech, gaming and online video to name a few. This diversified customer base supports continued growth while allowing us to allocate computing resources more flexibly and strengthen our pricing power and business resilience.

Now let me walk you through our business progress in the second quarter of 2026. In public cloud, revenue reached RMB 2.36 billion, up 45% year-over-year. First, Xiaomi continues to expand AI across its human car on ecosystem, while WPS AI continues to advance. As the only strategic platform for the Xiaomi and Kingsoft ecosystem, we see substantial AI-driven growth opportunities.

In June, our shareholders approved a further increase in the annual caps who connected transactions with Xiaomi. The combined HEPS for 2026 and 2027 now total RMB 10 billion, 39% higher than the full year adjustment. In the first half, public cloud revenue from Xiaomi and Kingsoft grew 54% year-over-year. Second, we further strengthened the mass capabilities of our [indiscernible] platform. [indiscernible] now supports 120 models with major new models launched on the platform in sync with their market release and serves more than 230 enterprise customers. Third, we defend cooperation with leading customers in emerging sectors. We delivered large-scale computing clusters to leading embody AI and autonomous driving customers, supporting rapid model iteration and expanded our cooperation with a leading AI for science customers to support the growth of this new business.

In Enterprise Cloud, revenue reached RMB 710 million. In public services, we signed an agreement with the [indiscernible] Communications Administration of the Yang Zou River to build Zanghai Cloud, a dedicated digital infrastructure platform for Young River shipping. We also followed a strategic partnership with the Wuhan municipal data bureau and Wuhan Cloud across computing resource interconnection, digital governance, intelligent computing applications and ecosystem development.

In digital health, we are leading a project under the national key R&D program on biology and information integration to develop a cloud-based virtual surgery platform, which has been deployed in more than 30 hospitals natural [indiscernible] In Enterprise Services, we defend our cooperation with [indiscernible] to jointly build and operate the Guangzhou Provincial Public Services Cloud under an integrated investment, construction and operations model.

In products and technology, we continue to upgrade our full-stack AI capabilities for intelligent computing and AI application deployment. This quarter, we further optimized the model deployment on [indiscernible] for high concurrency inference, significantly improving throughput for several core models and enabling more granular access usage and model level management.

We also launched Agent kits, providing secure sandbox knowledge and memory management and evaluation and governance tools to help enterprises build production-grade AI agents. At the same time, we are making general service cloud products such as database and storage, easier for agents to access and use. We enhanced the [indiscernible] training and inference platform with more flexible resource scheduling, sharing and allocation for training and fine-tuning workloads, improving utilization and reducing development and operating costs.

So private deployment of domestic AI infrastructure, our Galaxy Stack platform completed deep integration and full life cycle mutual management for multiple mainstream domestic AI chips.

Looking ahead, we will continue to capture opportunities both within and outside our ecosystem, improve the operating efficiency of our computing assets and strengthen our profitability and cash generation capability amid AI industry tailwinds. We remain committed to creating long-term sustainable value for customers, shareholders and society.

With that, I will hand the call over to our CFO, Li Yi, who will review our second quarter financial results.

Yi Li

Thank you, [indiscernible] and thank you all for joining the call today. I will now discuss the second quarter financial results [indiscernible]. Before we go through the details of the financial results for the second quarter, I would like to highlight [indiscernible]. First, our quarter revenue reached over RMB 3 billion for the first time in our company's history, up year-over-year for the last consecutive quarter. In particular, our AI cloud gross billing increased 82% year-over-year to RMB 1.33 billion, accounting for over 43% of our total revenue 31% a year ago. This reflects a continued structural shift in our business leading towards AI. Second, our profitability has improved. Our adjusted gross margins were 15.4%, up 2.4 percentage points quarter-over-quarter at 0.5% parentage points year-on-year.

Our adjusted EBITDA margin reached 36% up from 32% in the same quarter last year and 82% last quarter. Mostly when we had to break even at operating income level this quarter and recorded adjusting operating profit margin of 4%. These unconvalidate our ability to strong AIDC demand into healthy profit growth.

Third, we continue to invest to accelerate the buildout of our AI compute capacity. Capital expenditures, together with right of use assets of tenant through third party financing and the finance leases reached RMB 3.3 billion this quarter versus RMB 2.9 billion in last quarter and RMB 2.8 billion in the same quarter last year.

Now let me walk you through our financial results for the second quarter of 2026. This quarter, total revenue were RMB 3.72 million, up 31% year-over-year or 40% quarter-over-quarter. Of these revenues from [indiscernible] cloud service were 2,358 billion up 45% from 1,625 million in the same quarter last year.

Revenues from enterprise [indiscernible] reached RMB 740 million, compared with RMB 724 million in the same quarter last year, down [indiscernible] by 1% year-on-year. Total quarter revenues was [ 606 ] million, representing a 30% year-over-year or increase, mainly due to a continued investment in a cloud infrastructure.

IDC costs increased by 23% year-over-year from RMB 803 million to 1190 million this quarter. The increase was mainly due to the increase of [indiscernible]. Preamortization costs increased by 75% year-over-year from RMB 732 million in the same quarter of 2025 to RMB 964 million in quarter, largely due to the deterioration of newly acquired and listed AI infrastructure, including servers and network equipment.

Solution development and service costs increased by 4% year-over-year from RMB 564 million in the same quarter of 2025 to RMB 786 billion this quarter. The modest increase was mainly due to higher costs incurred in AI transformation in solution development and delivery. [indiscernible] costs and other costs were approximately $66 million in total this quarter [indiscernible] RMB 92 million in the same quarter last year.

Our adjusted profit for the quarter was RMB 472 million, increased by 35% year-over-year and 34% quarter-on-quarter. Adjusted gross margin was 15.4%, up from 14.9% in the same quarter last year and from 30% last quarter. The increase was driven by higher gross margin in public cloud business, thanks to strong demand tailwinds.

On the expense side, excluding share-based compensation cost expenses, our total adjusted operating expense were RMB 391 million decreased from RMB 761 million in the same quarter last year and from RMB 455 million last quarter, mainly reflecting our disciplined cost and expense control of which are adjusted risk and development expenses were [indiscernible] 84 million, up 1% year-over-year. Adjusted selling and marketing expenses were $102 million, down 7% year-over-year.

General and administrative expenses were RMB 105 million down 51% year-over-year, largely due to lower credit loss expenses. Our adjusted operating profit was RMB 124 million tolling profit from adjusted operating loss of $166 million in the same period last year. This improvement was primarily driven by the expansion of our revenue deal higher gross margin and enhanced operating efficiency.

Adjusted operating profit margin was 4% this quarter compared with minus 7.1% in the same period last year at minus 2.2% in the last quarter. Our adjusted net loss was RMB 6 million, down from RMB 300 million in the same quarter last year at RMB 237 million [indiscernible] Our non-GAAP dBA profit was RMB 1,100 million increased by 171% from RMB 406 million in the same quarter last year. Our non-GAAP EBITDA margin achieved 36% compared with 70% in the same quarter last year and 82% in the last quarter. It was mainly due to our improving growth profit as well as higher degration costs in our cost as we accelerate our AI computing capacity buildout. Ended June 30, 2026, our cash and cash equivalent totaled RMB 4,674 million compared with RMB 4,504 million as of March 31, 2026. The modest decrease was mainly due to our continued investment in AI infrastructure to support business growth.

Looking ahead, we aim to capitalize on the excellent growth in AI demand and further investing in infrastructure, expanding our product and service offerings, managing [indiscernible] equity risk and improving operating efficient. We remain commitment to our OEAI strategy and continue to deliver high-quality growth to our shareholders. Thank you all.

Unknown Executive

So this concludes our prepared remarks. We will now begin the Q&A session. If possible, please ask your questions in both Mandarin and English. So operator, please proceed.

Operator

[Operator Instructions] Your first question comes from Liping Zhao from CICC.

分析師問答

Unknown Analyst

[Interpreted]

Let me translate by myself. So good evening, Mr. and Ms. Li. I've got 2 questions on your mass business. First, how well improvements in open store model capabilities affect the company's mass business based on your observations, what's the current usage growth trend and which use cases are driving at most? And second, given the payback period for the mass business might be shorter. Will the company allocate more resources to it?

Tao Zou

[Interpreted]

Okay. So just quickly translate. So this answer comes from our SVP, Mr. Nota. So in relation to your first question, the development in open-source [indiscernible] models have mainly 3 impacts. Number one is that we are seeing a very big demand coming from [indiscernible] traditionally flooring model, taking the lead in this area. However, once we have seen the launch of KLM and K3, kind of high-performance models, we're seeing increasingly users from Mainland China adopting and using this made in China [indiscernible] model. And secondly, the increasing use of agentic scenario also broad change to our business. And with that, we have launched, as mentioned in the prepared remarks, the agent product to satisfy such needs. And certainly, it is worth mentioning that in terms of day-to-day routine tasks and workloads, the choice usually is the price for value kind of models, which are essentially the Chinese models. So that is why this development opens source [indiscernible] model is actually beneficial for our business. And your second question regarding the balance between mass business and the computing power. So we basically have different business models for the 2 business. For computing power business, essentially, once we sell the computing power, the utilization is financial 100%, and we usually come with long-term contracts to secure the utilization throughout a prolonged period of time, and therefore, it's relatively safe, so to speak. But for the mass business, it is subject to quality of factors, including the fluctuation of the token price, the launching of new models, which the governors might prefer to use and also the operating efficiency that we're able to achieve in doing the mass business.

So therefore, we generally balance these 2 business models and hope to have each one of them complement the other one. So we generally dynamically evaluate these 2 business and at the product side, how much resources to allocate.

Operator

We will take our next question -- next question comes from Wenting Yu from CLSA.

Wenting Yu

[Interpreted] The first question is that since joined, how has the chip procurement progressed in recent months? And what's your latest full year CapEx guidance? And the second question is about the enterprise cloud. This time the segment of revenue has decelerated in the past 2 quarters. How should we think about the full year enterprise growth and what's the AI transformation and medium-term positioning for this segment?

Unknown Executive

[Interpreted]

So allow me to quickly translate. So the answer comes from our -- so 3 points. Number one, actually, since 2023, it's been 3 years, and the market has always been hearing voices about the limited supply. So I would say this is actually a new norm. The tech supply on difficulty is actually a long-term kind of situation. But secondly, we should also be aware of the fact that despite of those constraints, financial constraints, the Chinese cloud computing AI industry development has not been restricted or largely restricted by that. And the way that we actually tackle with such situation is that we try to increase the number of business partners that we work with. We try to increase the number of suppliers we work with and we also work with the increasing the compatibility of made in China chips. You are all very well very much aware of the -- recently many of the many China chips are becoming public, and they are particularly good in use cases such as model interest.

Now number three, I would like to say that when you look at the CapEx number from a month-to-month basis, it is usually quite volatile. And I have to say that the purchasing number because of it's usually a large chunk of money in a relatively small number of projects. So the purchase number, if you look at it on a monthly basis, is actually not a linear number. So I would say that for our whole year CapEx estimate, it should still be in line with what we have been expecting and our CFO should be able to give you more details in that regard.

Tao Zou

Our cash expenditure includes [indiscernible] asset to lease arrangement, reaching RMB 6.2 billion in the first half of 2026 accounted for over 75% of our portfolio CapEx last year, where July stature cannot fully represent third quarters of all trends. It clearly shows tangible growth acceleration. Accordingly, we maintain our full year CapEx base case unchanged at [indiscernible] Billion. Thank you, Tintin.

Operator

We will take our next question.

Unknown Executive

Sorry, we need to continue [indiscernible]

Operator

Apologies.

Unknown Executive

[Interpreted]

Okay. So this answer comes from our [indiscernible]. So generally, I don't think -- although we are seeing relatively slow growth in the enterprise cloud segment, I would say it is not the right way to look at it from the linear extrapolation perspective. I will give you 3 reasons. I think number one, just to explain why we're seeking -- looking at relative business in this regard is that the upstream supply pricing hiking hike which changed quite significantly in recent quarters, has affected the -- our prospective customers, essentially the SOE companies and also the government agencies to -- they have to frequently adjust their budgeting product, which delayed their decision-making process. So that's number one. And number two, you're all quite aware that the seasonality in enterprise cloud business is quite strong. Usually, the delivery and revenue recognition are concentrated in the second half of the year. So we have actually quite a strong pipeline to deliver in the second half of the year.

And thirdly, this is actually a result of a proactive adjustment of our business structure namely proactively from the project-based business model to an operating base business model, where operating business model from a financial reporting perspective is automatically classified into public cloud. So this is not typically as it what sees as a weakening of the enterprise cloud business. So that's the 3 points I like to offer.

Operator

We will take our next question comes from Timothy Zhao from Goldman Sachs.

Timothy Zhao

[Interpreted]

My first question is regarding the mass [indiscernible] Just wondering compared to the peers in the market. How do you think about the Kingsoft Cloud competitive advantage in a master basis in terms of the application scenario, et cetera? And could you share more about the revenue recognition and the profitability profile of the mass service bid.

Second question is regarding the overall pricing trend in the AI cloud business. Just wondering if you can share -- what is the latest trend over the past couple of months? And what have you heard from the customers after you announced certain price hikes or discount reduction over the past few months and whether you are able to quantify the impact from the price hike to your overall AI cloud revenue growth.

Unknown Executive

[Interpreted]

So in relation to your question about the positioning, we do have a unique position in the mass business Mainly, we're different from some of the total providers, which they have their in-house or proprietary models, we do not have such models. And therefore, correspondingly, we do not have to sell those [indiscernible] models that our affiliate companies have to offer. And as a result, we're able to actually sell and we actually encourage our sales team to sell the models that our customers like the most, for example, GRM et cetera.

So that's number one. And secondly, it's quite important in today's market to have your proprietary or your own computing power, which is the only way that you can actually secure significant profitability in this business.

So in relation to your question about the price hike. So there are basically 2 products which are core solutions that we have employed increasing price -- number one, that is storage and number two, that is computing power. I'll talk about them separately, respectively. In terms of storage, storage is usual, the incremental amount of storage is actually comes with the intelligent computing demand. That is a relatively small portion of the intelligence computing our overall ticket size. And therefore, in the vast majority of the customers that we negotiated with they are relatively [indiscernible] such price hike. In which case, as a result, we're actually able to not only -- in some places, not only pack through the Nepris in our cost, but also increasing our profitability in that scenario.

And number two, in terms of computing power, because of our specific capabilities, including PAC capabilities as well as the operating maintenance and network capabilities, again, we are able to pass through that cost hike into our customers. In some of the cases, we also increased our profitability. And in this quarter, we have also some projects in which we are doing managed the services, which is an asset-light business model. We look forward to seeing more of that coming to [indiscernible]

Operator

We will take the next question. Your next question comes from Wes Yang from UBS.

Wei Xiong

[Interpreted]

Congrats on a solid quarter. Considering the proprietary models and user ecosystem of other cloud providers, how should we think about our long-term positioning in the cloud market and the sustainable margin level down the road?

Unknown Executive

[Interpreted]

So we believe that [indiscernible] AI cloud service providers is important to be able to offer the top models, which the customers like and also stable services to our customers. So as mentioned, as a neutral cloud player, we are able to be in good relations with all of the top model providers [indiscernible] mono labs and be able to provide the best model according to our customers' demand. And also, we're able to -- based on our technology capabilities, we're able to provide highly available and high reliable services to them. based on out of the SLAs that we signed with them. I think thirdly, in relation to profitability question you asked, it is important to work closely with the LM terms labs to, for example, to optimize, to optimize the influence of those models. And that will include the, for example, working with them based on the undisclosed weighting of the models to increase our influence model influence efficiency.

In some of the cases, we're able to get to very close level or even reach the same level of the influence efficiency coming out from the [indiscernible] companies themselves. Thank you.

Operator

We will take our final question. Your final question comes from Yang Liu from Morgan Stanley.

Yang Liu

[Interpreted]

Let me translate my question. I would like to ask on the 2 business model, computing power leasing and Model as a service, what is the ROIC for these 2 business models? And what is the marginal change for the ROIC.

Unknown Executive

Thank you, [indiscernible] At this stage, we don't disclose separate our SD Mark and computing power services. because varies across projects, driven by payback secureness margin, fixed assets and depreciation policies. Overall, must be with much better probability than back into the core servicing at this stage. We have seen continued improvement in maintaining leverage and our business scales are fixed costs are steadily diluted and our trailing translates adjusted operating profit is trend positive, driving a gradual recovery in our overall ROIC. We adhere to demand drilling and a disciplined investment strategy with a strong focus on capital efficiency. With the continuous business structure of [indiscernible] and the material AI mediation. I think our overall LSC will keep improving steadily.

Operator

There are no further questions. Apologies. [indiscernible] the question-and-answer session. I will hand back for closing remarks.

Unknown Executive

Okay. Thank you all for joining us today. If you have any further questions, please contact our IR team. So have a good evening. You may now disconnect. Thank you.

Operator

This concludes today's conference call. Thank you for participating. You may now disconnect.