Serve Robotics Inc. (NASDAQ:SERV) Q3 2024 Earnings Call Transcript

Serve Robotics Inc. (NASDAQ:SERV) Q3 2024 Earnings Call Transcript November 9, 2024

Operator: Thank you for standing by. My name is Kathleen, and I will be your conference operator today. At this time, I would like to welcome everyone to the Third Quarter 2024 Financial Results and Conference Call. All lines have been placed on mute to prevent any background noise. [Operator Instructions] And now I would like to turn the call over to Aduke Thelwell, Head of Communications and Investor Relations. Please go ahead.

Aduke Thelwell: Thank you, operator, and good afternoon, everyone. Welcome to Serve Robotics Third Quarter 2024 Conference Call. With me today are Serve’s CEO and Co-Founder, Ali Kashani; and our CFO, Brian Read. During today’s call, we may present both GAAP and non-GAAP financial measures. If needed, a reconciliation of GAAP to non-GAAP measures can be found in our earnings release filed earlier today. Certain statements in this call are forward-looking statements. You should not place undue reliance on forward-looking statements. Actual risks may differ materially from these forward-looking statements, and we do not undertake any obligation to update any forward-looking statements we make today, except as required by law.

For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the press release we issued today as well as the risks and uncertainties described in our most recent Form 10-K and in other filings made with the SEC. We published our quarterly financial press release and updated corporate presentation to our Investor Relations website earlier this afternoon, and we ask you to review those documents if you haven’t already. With that, let me hand it over to Ali.

Ali Kashani: Thanks, Aduke. All right. Since our last call in August, we’ve been busy. We’ve been making a lot of progress that I would like to catch you up on today. I’ll try to keep it short. First, let’s talk about our progress towards scaling. We are on track to deploy 2,000 robots by the end of 2025 under our agreement with Uber, pushing us towards expected run rate of $60 million to $80 million in annual revenue once the robots are deployed and reach full utilization. And I want to reveal our next city beyond L.A. today. So stay tuned. Next, we are going to dive into some of the strategic moves that we are making, including today’s announcement about acquiring the kitchen robotic start-up, Vebu, Inc. We’ll also talk about our new partnerships with Shake Shack and Wing Aviation and also give you a quick update on our work with Magna International.

And then I’ll pass it to Brian to walk you through last quarter’s financials and our recent financing moves. So let’s jump in. I’m happy to report that we are on track with our rollout plan. We recently announced our third-gen robots. And while we initially expected them to hit the sidewalks early next year, we are now set to deploy 75 of them by this year’s end. That’s going to double our delivery fleet. By the end of Q1, we will have 250 of these robots cruising around L.A. as planned and we are still on track to enter our first new market outside of L.A. by the end of Q2 next year. Now on the manufacturing side. Our third-gen robots are rolling off assembly lines with the first ones already delivered to our L.A. facility. These units were delivered a few weeks ahead of schedule and they have performed well in certification testing.

Q&A Session

Our approach is still phased and delivered, deploying in batches to ensure that we are scaling smoothly. With 250 more robots coming to L.A. in Q1 next year, we are expanding into new areas, including Downtown L.A., Sawtelle and Westwood. I was there last week visiting two new robot depots that we have secured and exploring new neighborhoods that we are going to be serving. We’ll start delivering in these neighborhoods over the next couple of weeks, effectively doubling the number of restaurants that we serve on our platform. As the fleet grows over the coming weeks and months, we also plan to extend our service into other neighboring areas. Now for the big reveal. Our first market outside of L.A. is going to be the Dallas-Fort Worth Metro.

Dallas is a dense city with a booming commercial hub and an innovating edge. It’s the first city to permit beyond line of sight drone delivery, for example. Expanding there would let us ramp up our partnership with Wing Aviation after the pilot as well. By year-end 2025, we are expected to be on track to deploy all 2,000 robots as we planned, aiming to get to run rate of $60 million to $80 million in annual revenue once they hit full utilization, which in new cities could take about six months to 12 months. The full cost recovery for each robot is also expected to occur within 12 months. Now, let’s dive into some of the strategic announcements we’ve recently made. First off, Shake Shack. Back in August, we kicked off a partnership to deliver Shake Shack orders with our robots in L.A. We are optimistic that this will expand to new cities as we show the value of robots.

This can also serve as a model for other national partners. This particular partnership came through our relationship with Uber, which is a nice reminder of how Uber’s enterprise relationships can actually be valuable for Serve. Next, let’s talk about Wing Aviation. We announced this October that robots and drones are teaming up for deliveries. Wing has done hundreds of thousands of deliveries worldwide from medications to library books and coffee and food, and Dallas-Fort Worth is one of the first U.S. metros that has cleared drone operations beyond line of sight. This partnership is really one of a kind. Successfully showing this model works can open up opportunities for both companies. By combining our robots with Wing drones, we are covering both short and long-distance deliveries together addressing deliveries up to six miles.

This is an ideal way for our merchant partners to automate a large portion of their deliveries, and we believe that multi-modal robotic delivery will be the most efficient for millions of packages delivered every day. As I like to tell my team, the only thing that’s cooler than robots is robots and drones working together. We’ve been working on this partnership for some time and I’m excited to see what potential it can unlock. I believe this can help us accelerate our conversations with national chains as well. I think the last few years have been all about every start-up working in their silos and getting their tech to work and get ready for scale. But now we are finally putting the pieces of the puzzle together to bring forward this future of automated delivery that we’ve all been waiting for.

And one bit of news to share is that we expect to launch the Wing pilot in Dallas in the coming weeks. This aligns well with our plan to expand to Dallas-Fort Worth by Q2 2025 in full scale. Finally, a quick update about our collaboration with Magna International. We hadn’t talked about this before, but our software services work with Magna is moving into a new phase. Magna is one of the world’s largest auto manufacturers and they’re also assembling our new robots. Over the past three quarters, we’ve recognized revenue from a non-recurring software services contract with them, which mostly wrapped up in Q2. Now, we’ve entered the second phase, which should generate a few hundred thousand in revenue next year. The work relates to Magna licensing software to create new products.

And while the revenue is non-recurring, it’s a testament to our relationship with Magna and our tech leadership in the field. All right. One last thing. We have signed an agreement to acquire Vebu, Inc. You might know them from recent headlines about Autocado, the robot that has avocado prep time and was developed by Vebu in collaboration with Chipotle. We are bringing the Vebu team onboard to expand into kitchen automation. Big food chains have limited time to work with tech start-ups. So offering both kitchen and curbside solutions to them would make us a one-stop shop for their needs. This is a valuable competitive advantage. Vebu and Serve are solving the same problem, which is labor shortage, with the similar tech, which is AI and robotics, and for the same partners.

So this will deepen our relationship with national chains. And as we expand our delivery footprint, it can accelerate our integration with them. Another benefit from this is Vebu’s Founder, Buck Jordan, and his stellar team joining us. Buck is a big name in food automation and founded Miso Robotics before Vebu. He was also one of Serve’s earliest backers. And soon after we spun out of Uber, he joined our Board. Over the years, he has opened many doors for us with some of the biggest names in the food industry. I feel honored because it’s not often you can assemble a team of experienced founders together all putting in the same direction. On top of the team and tech, there’s also potential revenue growth and cash flow here. Autocado is in pilot at Chipotle.

And if all goes well with their stage-gate validation process, it could roll out to more stores and bring in a fresh revenue stream. To sum up, this acquisition is a strategic milestone that brings us an exciting product, a brilliant team, a deeper partnership with national chains and a potential new revenue and cash flow stream. Due to the smaller size of the deal, we won’t be disclosing the terms and it remains subject to customary closing conditions, but I can share that it is an all-stock transaction. We believe Vebu’s balance sheet cash will be sufficient to fund the Autocado pilot, after which it is expected to ramp up revenue. I’m really excited about this potential acquisition and I cannot wait to update you as we move forward.

So let’s recap. We are a bit ahead of schedule on our 2,000 robot deployment. By this year’s end, we are looking at a fleet twice the size we had originally planned. We are also quickly expanding our service area in Los Angeles to Downtown L.A., Sawtelle and Westwood. We’ve got a new partnership with Shake Shack in L.A., which we hope will expand and pave the way for future national partners. Then there is a collaboration with Wing where robots and drones are teaming up. We expect this to be up and running in the coming weeks, allowing us to cover a big range of delivery distances together. This will also bring us to Dallas-Fort Worth area for the first time, initially at a small scale for the Wing pilot and then for our full expansion expected by the end of Q2 2025.

There is also the partnership with Magna, which is going strong with a new software services phase underway. And lastly, we are excited about bringing Vebu into the fold once the potential transaction closes. Together, we expect to be able to offer a more complete solution to restaurant partners, thanks to both Vebu and Wing and deepen our relationship with them and potentially speed up our revenue growth and path to profitability. All of this aligns with the master plan I shared with you on our last earnings call, own food delivery first, then expand into other verticals, and finally, use our core robotics tech to power new robot forms that co-exist with humans. All right. That’s it for me. Brian, please take over with the third quarter financials and insights.

Brian Read: Thanks, Ali. Today, I’ll walk through our solid financial performance in Q3, talk about the steps we’ve taken to increase our financial flexibility and provide directional insights as we look forward to a transformative 2025. We delivered total revenue of $222,000 for the third quarter of 2024. Delivery and branding revenues contributed $183,000 with delivery revenue being a 49% increase over the prior quarter and a 108% increase from the same period prior year. The increase was attributed to improved utilization of our existing delivery fleet, which benefited from both software enhancements and operational improvements during the quarter. While marginal in their dollar impact, these improvements are critical as we prepare for fleet expansion.

During the third quarter, we had 59 daily active robots, representing a 23% increase quarter-over-quarter and 97% increase compared to the same period prior year. These active robots produced an average of 465 daily supply hours, a 21% increase quarter-over-quarter and 108% increase compared to the same period prior year. As communicated last quarter, we saw a reduction in our third quarter software services revenue, which contributed $39,000 during the quarter. While our initial software services contract with Magna is complete, we look forward to providing further services under the recently signed agreement. From this, we anticipate recognizing a few hundred thousand dollars of additional revenues in the first half of 2025. Our cost of revenue during the third quarter was $377,000.

The decline in reported gross margin compared to the previous quarter was primarily due to a reduction in higher margin software services revenue. On a year-over-year basis, our delivery and branding gross margins improved 84% compared to the same period prior year. Stock-based compensation for the third quarter was $2.2 million compared to $3.5 million in the prior quarter and $0.1 million in the same period prior year. Operating expenses for the third quarter were $8.3 million compared to $8.7 million in the prior quarter and $5.1 million in the same period prior year. In the third quarter, we had interest income of $449,000, reflecting the benefits of the higher cash balance following the recent capital raise transactions and debt repayments I will explain in a moment.

That compares to interest expense of $260,000 and $1.5 million in the prior quarter and a year ago respectively. Our net loss for the third quarter shrunk to $8 million compared to $9 million in the prior quarter. Turning to our cash position and financial flexibility. For the third quarter, free cash flow, calculated as cash flow used in operations minus capital expenditures, was negative $10.1 million and included approximately $6.9 million related to manufacturing costs. However, our overall cash position was bolstered by two equity transactions. Our July and August transactions were private placement offerings, consisting of pre-funded warrants to purchase shares of common stock and warrants exercisable for common stock. These transactions and associated warrant exercises generated net proceeds of $32.3 million in the quarter.

These transactions not only delivered substantial liquidity for the company, but were executed at favorable premiums to our April 2024 NASDAQ listing price. In addition, we also received $700,000 from proceeds of additional warrant exercises. As of September 30, 2024, there were approximately $5.5 million warrants outstanding with a weighted average exercise price of $5.41 [ph]. We fully repaid the outstanding balance on our secured term loan, reducing the company’s balance to zero as of September 30. This positions us with a strong cash balance of $50.9 million, which we anticipate provides sufficient capital to support our 2,000 robot rollout in 2025. Earlier today, we established a new ATM program, providing us with further flexibility in capital raising.

While our current balance sheet and forward projections do not indicate any immediate need for capital, we view this as a prudent step that provides us with important optionality if our capital needs change or we see new opportunities in the marketplace. Our total available credit under signed commitments with equipment financing partners remains at $11.6 million. As of today, no amount has been drawn under these facilities. And due to the upfront capital requirements for our fleet, we will continue to explore effective financing solutions for our robots. The net result of these important steps to secure our financial position is that we have alleviated the significant doubt for our going concern as of the filing of our Form 10-Q this afternoon.

The recently announced acquisition of Vebu, which Ali discussed earlier, presents a compelling opportunity for our organization. While we are not yet releasing financial information as we work towards completing the transaction, we have initiated preparations to ensure a smooth integration process. As Ali noted, this acquisition is structured as an all-stock transaction with no upfront cash consideration, and Vebu brings a balance sheet, which we expect to be sufficient to fund the operations through the duration of the Autocado pilot phase. Post closing, we anticipate a modest increase in our quarterly operational cash use, primarily driven by headcount and production readiness costs. It’s important to note that this is a relatively minor transaction and we have no plans to seek additional capital to finance this acquisition.

We remain committed to a disciplined approach to capital management focused on strengthening our balance sheet to deliver sustainable growth and long-term value for our shareholders. Lastly, I’d like to provide some directional insights as we look towards 2025. Our financial outlook continues to project a run rate of $60 million to $80 million in annualized revenue once the robots are deployed and reach full utilization. Specifically, we anticipate growth in delivery and branding revenue streams, resulting from the ongoing geographical expansions in Los Angeles, expansion into the Dallas-Fort Worth metro area scheduled by the end of Q2 and additional cities throughout the year. As previously indicated, the majority of the 2,000 robots related to our Uber contract will be deployed in the second half of 2025.

And therefore, we expect our revenue to be weighted towards the latter half of the year. For branded growth, we are exploring resources to expand our revenue pipeline, meeting strong demand from customers seeking to leverage our expanding fleet for advertising campaigns. Software service revenue should be considered non-recurring in the near-term. We will provide specific updates on software contracts as appropriate. Our newly signed software services agreement with Magna is expected to generate a few hundred thousand dollars in additional revenues in the first half of 2025. These updates are consistent with previous statements and underscore our ongoing commitment to disciplined strategic growth. With that, let’s turn it over to questions.

A – Aduke Thelwell: Thank you. We will now move into addressing questions. I’d like to start by thanking all the investors and analysts who submitted questions to us via e-mail. We appreciate your engagement. So this first question is from Mike Latimore at Northland. By the end of 2025, do you expect to have 2,000 robots in total or 2,000 robots in addition to 2024 levels? Brian, would you like to take this first one? Thanks.

Brian Read: Yes, for sure. Thanks Mike. So yes, to be clear, we are aiming to have a total of 2,000 robots by the end of the year 2025. To clarify that, it doesn’t mean that the entire 2,000 robot fleet will be active robots and in service at all times. As you could expect, managing a larger fleet, we have to have maintenance on that. We will use the fleet for some R&D efforts. And we’re thinking about that right now probably in the high-single-digit percentages with respect to the 2,000 robots. So I hope that provides some color.

Aduke Thelwell: Okay. Thank you, Brian. This next question is from Rommel Dionisio at Aegis. He’s asking, could you discuss the advantages of the third generation robot in more detail? Specifically, how much might revenue generation improve? And how was manufacturing cost halved, while functionality was increased? Ali, do you want to take this one?

Ali Kashani: Absolutely. So our third-gen robots have about 70% more battery. They have about twice as much speed. They can basically deliver more items per day than the current robots. That’s what drives the revenue increase. Also, they have better sensors and five times more compute power, which is what – basically what that means is that they can generate that revenue more efficiently. But what I’m particularly proud about is the fact that we have achieved all these improvements in the robots, while at the same time, decreasing the cost of the robot in half. So we’ve made certain components that used to be off the shelf are now being made in-house. This removes overhead. We have robots that are now optimized from a design point of view for cost, so better manufacturing and lower parts costs.

We also have components that have improved in terms of both performance and cost because of Moore’s Law like batteries and LiDAR and GPUs. And lastly, we are building robots at a larger scale than previous builds, which also helps us reduce costs. I also expect that all these trends will continue moving forward because we are going to improve our designs and remove further components that are off the shelf and also scale further, so bring the cost down from all those forces that I just mentioned earlier.

Aduke Thelwell: Okay. Thanks, Ali. All right. Another question from Brian Kinstlinger at Alliance Global. How many stores are signed up to uServe’s robot delivery? And how does this compare quarter-over-quarter and year-over-year? What is a reasonable goal for the number of stores opting into uServe robots a year from now in your current regions and why? So that’s a multi-part question. Ali, do you want to take this one?

Ali Kashani: Absolutely. So currently, we have more than 400 restaurants that we are serving in Los Angeles. I believe last quarter, the number we had shared was in the 300 range. So that’s already grown. And just in the next couple of weeks, as we expand in Los Angeles, we expect our total number to almost double. So we would have about 750 restaurants that we will be serving just in Los Angeles. We don’t have projections for where we are going to be next year, but that kind of gives you a sense of what the expansion rate is going to look like.

Aduke Thelwell: Okay. Thank you. All right. The next question is one that we got from quite a few of you via e-mail, and it’s about the election. Do we anticipate any impacts to Serve from the recent election such as shifts in local regulation or any impact on possible tariffs? Brian?

Brian Read: Yes. Let me tackle that one. So obviously, we don’t have a crystal ball with respect to how the tariffs and the percentages are going to play out over the next four years. But color for that is we’re going to track both the recent election from a regulatory and a policy standpoint as well as the tariffs. Regulation and policy, our team has dialed in from a metro and neighborhood perspective. And favorably, we see a lot of legislation that’s being proactively passed to allow our robots to operate on the sidewalks. So we’re looking for trends there that we’ll continue to monitor. On the tariff side, I would provide that our supply chain is global, but most of our materials are coming from countries other than China. So with respect to the magnitude there, we’ll provide more information as more concrete terms come to the market.

Aduke Thelwell: Okay. Thank you. Next question is from Glenn Mattson at Ladenburg. Can you share details on your plans to scale up? Beyond procurement of the robot, there’s also deployment and getting them into service. Can you talk about acceptance by restaurants and customers and everything necessary to maximize revenue per robot? Ali, would you want to take this one?

Ali Kashani: Absolutely. So we have an effective expansion playbook as we have been expanding in Los Angeles and even doing pilots outside of Los Angeles. It starts by selecting the cities and neighborhoods we are going to based on historical delivery data. This is something we have a unique kind of skill set around because we were born inside one of the largest delivery platforms and are really familiar with that data and the insights. Once we choose the markets we are expanding to, we secure depots to place the robots in. For example, our recent L.A. expansion required two new depots that we just secured. And then as we do that, of course, we put in place the field operation team who are in charge of managing and charging and maintaining the robots.

And then once that’s in place, we obviously work with our partners like Uber to get merchants and customers onboard. In many cases, getting a restaurant onboard is a simple e-mail that informs them about the program. And they can opt out if they do not wish to be part of the program, though we find that to be a very low percentage. In some cases, like certain QSRs may have custom point-of-sale systems. In that case, you need a different kind of outreach and integration work. And then customers are also the same. They usually place an order and then find out that the restaurant they are ordering from is supported by Serve. Again, they can opt out if they so choose, but they’re also informed that they won’t have to provide a tip to a robot, which is something customers find really compelling.

So in both cases, we find really low opt-out rates. People are generally both merchants and customers excited to use the robot. And then once you have all these pieces, of course, the final step is ship the robots to those operating areas.

Aduke Thelwell: Okay. Thank you. The next question is from Richard Shannon at Craig-Hallum, and it’s on utilization. He says, on the Q2 call, Ali, you said we have more demand than supply, but then you also said you expect it could take up to a year to see full utilization of the 2,000 robots. How should we resolve these two comments?

Ali Kashani: Well, there are a number of steps that go in between securing demand and addressing it. Obviously, you start by setting up robots and operations. But once you do that, you need – it takes us a few weeks and sometimes a few months to become really efficient in that area. We have to, for example, get familiar with the geography, map the space. Even as we are operating, we are collecting more information, new information as we come across new places. And for example, identify routes that are faster than others. You don’t really operate at peak performance from day one. And of course, we also have this process of getting more and more merchants onboard. Again, a lot of them can be onboarded with an e-mail, some of them require additional steps.

But the nice thing about this is that once you do a custom integration with someone that’s a QSR, in future, when you go to a new neighborhood and you see the same merchants, you don’t have to do that anymore. So it becomes even faster and more efficient. And then over time, we are, of course, going to get better and better at this process. I think there are a lot of examples for this kind of growth playbook, including even in food delivery and ride-sharing where you can see that every subsequent market launch, folks get better at doing it and can get to peak efficiency faster. We expect to have the same kind of learning curve and get better over time.

Aduke Thelwell: Okay. Thank you. Another question from Mike Latimore of Northland. He says, you say the 2,000 robots could generate between $60 million to $80 million in revenue. Does that range include branding fees? And what happens – what needs to happen to get to the upper end of that range? Brian, I think this one might be for you.

Brian Read: Yes. Let me elaborate and it kind of continues on Alex’s previous question about all the steps we’re going to take with respect to expansion. But to hit the first question, yes, the $60 million to $80 million is delivery and branding in that number. We would expect that delivery services will contribute the majority of that revenue as we start to ramp up and hit the run rates that we’re talking about. I think it comes down to utilization on those robots and then increasing our ad conversions on our branding campaigns. As we mentioned in the script, we will have focused resources and figuring out as we expand into each of these cities and metros how we can best capitalize on the branding and advertising revenue that’s available to us.

So that’s something else that we’ll be definitely focusing our attention on. And then the piece that’s not in here, just to be clear, is software. And I think we’ve been consistent that the software should be considered non-recurring as we move forward. There will be exceptions like we talked about with Magna, and we’ll address those more on a one-off basis moving forward.

Aduke Thelwell: Okay, perfect. Thank you. The next question is from Aaron Kessler at Seaport. What are you seeing from a competitive standpoint from other sidewalk robot companies? Would you expect industry consolidation? Ali, maybe you can answer this one.

Ali Kashani: Certainly. I think that we’ve seen a lot of different approaches to delivery in general, whether long or short distance. There are a few different bets over the years taken specifically with sidewalk robots. I think robotics is very sexy. It addresses a major pain point, attracts a lot of effort. Over the years, we’ve seen some contrarian bets taken here. But I think we are now starting to see the market largely validate a lot of the design and go-to-market decisions that we have made since early days. For example, we initially saw folks using robots with very minimal capabilities, like usually short battery life, no LiDAR, small six-wheel drivetrain architecture, remotely operated. A lot of these are now much more focused on campuses.

And we’ve also seen robots on, let’s say, bike lanes. Now I’m seeing this pattern of folks increasing battery life realizing that they have to cover all day battery, which is similar to our robots, replacing six wheels with four wheels because it’s way more efficient than you’re trying to have the right amount of battery life or even changing messaging around emphasizing AI and autonomy even if they’re not that far along. Also, I don’t see anyone focused on bike lanes anymore. So a lot of these decisions I think we are starting to see a pattern of where folks are converging. I obviously take a lot of pride in the decisions we made early and the bets we’ve taken being proven right. I think folks that have started in a different spot may face some limitations.

That may be why there are a lot of folks focused on campuses with more forgiving and more enclosed environment. And then when you look at the biggest market environments for these robots, like the urban environment, we are really leading the pack. So overall, I do expect this kind of convergence. We will obviously keep our eyes open for consolidation opportunities. We’ve had some inbound interest as well from teams that needed more support. But to date, we haven’t seen anything – any technology or product that seems like an acquisition that made sense for us. And then the last thing I would just mention is the way things are moving forward based on at least the information that is out there, by the end of next year when we deploy our 2,000 robots, we expect to be the, if not one of the largest or if not the largest, one of the largest AV fleets in North America.

So we feel like we are in a very good position.

Aduke Thelwell: Okay, great. So speaking of potential acquisitions, the last question is a composite of some e-mails that we’ve gotten in the last hour, and it’s about the Vebu transaction. Can you explain how you expect the Vebu acquisition to play out? And what Serve’s relationship with Chipotle will be? And what next steps will be for the Autocado product moving past the pilot stage? Ali?

Ali Kashani: Absolutely. So Autocado is currently being piloted by Chipotle, and that’s all we can share about that right now. But obviously, we’ve done our diligence. We feel really good about the technology and the team and the opportunity and we are also excited to collaborate with Chipotle. The key insight I think is that as we’ve expanded our footprint and expanded our relationship with restaurants, we understand that to be able to have a deeper partnership with them, you need to address kind of their pain points more holistically, because folks don’t have a ton of – they don’t have infinite bandwidth and time to explore every single technology out there, every single start-up out there. What we want to be able to offer them is a more holistic solution so that we can actually meet them where they are.

And I think they’re looking at their kitchens, they’re looking at their delivery and kind of curbside and we can be a one-stop shop now that Vebu would be joining us. And that’s really the objective here. And at this moment, we are going to launch thousands of robots next year. And our hope is that with products like Autocado, we are going to have a similar type of scale happening in a not-too-distant future with the kitchen automation side of our business when this acquisition is completed.

Aduke Thelwell: Okay, perfect. Those are all the questions we have for today. So thank you everyone for joining us, and we look forward to continuing the dialogue. Operator, over to you.

Operator: Ladies and gentlemen, thank you all for joining. That concludes today’s call. You may now disconnect.