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Alpha and Omega Semiconductor Ltd (AOSL) delivered a robust performance in Q4 2025, significantly surpassing earnings and revenue forecasts. The company reported an EPS of $0.02, far exceeding the forecasted $0.0033, marking a surprise of 506.06%. Revenue reached $176.5 million, also surpassing expectations of $166.4 million. Following the announcement, AOSL’s stock price increased by 0.5% in after-hours trading, reflecting investor optimism. According to InvestingPro analysis, AOSL is currently trading below its Fair Value, with the stock maintaining strong liquidity metrics and holding more cash than debt on its balance sheet.
Key Takeaways
- Alpha and Omega Semiconductor reported a notable EPS surprise of 506.06%.
- Revenue grew by 9.4% year-over-year, reaching $176.5 million.
- The stock price rose by 0.5% in after-hours trading.
- Strong growth was driven by record revenues in the Power IC segment.
- The company sold a 20.3% stake in its Chongqing joint venture for $150 million.
Company Performance
Alpha and Omega Semiconductor demonstrated strong financial performance in Q4 2025, with a 9.4% increase in revenue year-over-year. The company achieved record revenue in its Power IC segment, which grew by 30.2% year-over-year and now constitutes approximately 40% of its product revenue. The computing segment, driven by AI and graphics chips, also showed significant growth, with AI and graphics making up about 25% of this segment. InvestingPro data reveals the company maintains a healthy current ratio of 2.57 and an Altman Z-Score of 3.62, indicating strong financial stability. Subscribers can access 8 additional ProTips and comprehensive financial metrics through InvestingPro’s detailed research reports.
Financial Highlights
- Revenue: $176.5 million, up 9.4% YoY and 7.2% QoQ.
- Non-GAAP EPS: $0.20.
- Non-GAAP gross margin: 24.4%.
- Product revenue (excluding licensing): Up 13.7% YoY.
Earnings vs. Forecast
Alpha and Omega Semiconductor’s actual EPS of $0.02 significantly beat the forecast of $0.0033, resulting in a surprise of 506.06%. The company’s revenue of $176.5 million was also above the expected $166.4 million, marking a 6.07% surprise. This performance reflects positively on the company’s strategic initiatives and market positioning.
Market Reaction
Following the earnings announcement, AOSL’s stock price increased by 0.5% in after-hours trading, closing at $26.2. This movement reflects a positive investor sentiment, driven by the company’s strong financial performance and favorable outlook. The stock remains within its 52-week range, with a high of $53.29 and a low of $15.9. InvestingPro analysis indicates the stock has shown significant volatility, with a beta of 2.15, while trading at attractive multiples with a Price-to-Book ratio of 0.88 and EV/EBITDA of 7.7.
Outlook & Guidance
Looking ahead, Alpha and Omega Semiconductor has provided Q1 revenue guidance of $183 million, with a possible variance of $10 million. The company anticipates low single-digit sequential growth in the computing segment and more than 10% sequential growth in the communication segment. However, a mid-single-digit sequential decline is expected in the consumer segment. Analyst consensus gathered by InvestingPro shows a strong buy recommendation with a median price target suggesting 22% upside potential. The company’s comprehensive Pro Research Report, available to subscribers, provides detailed analysis of growth drivers and risk factors.
Executive Commentary
CEO Stephen Chang emphasized the company’s transformation from a component supplier to a solutions provider, stating, "We are delivering on our commitment and advancing our transformation." CFO Yifeng Liang highlighted the strategic sale of the Chongqing joint venture stake, noting, "After this transaction, the new investor plans to inject significant capital into CQ JV to further expand its capacity."
Risks and Challenges
- Potential supply chain disruptions could impact production and delivery.
- Market saturation in key segments may limit growth potential.
- Macroeconomic pressures, including tariff impacts, could affect profitability.
- Increased competition in AI and graphics segments could challenge market share.
Q&A
During the earnings call, analysts inquired about the contribution of AI to the computing segment, which currently stands at 25%. Questions also focused on the company’s flexible manufacturing strategy and its balance between internal production and third-party foundries, as well as the minimal direct tariff impact on shipping.
Full transcript - Alpha and Omega Semiconductor Ltd (AOSL) Q4 2025:
Jason, Conference Moderator: Good afternoon, and thank you for attending the Alpha and Omega Semiconductor Fiscal Q4 twenty twenty Earnings Call. My name is Jason, and I’ll be the moderator today. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. Now I’d like to pass the conference over to your host, Stephen Galleo.
Stephen Faleo, Investor Relations Representative, Alpha and Omega Semiconductor: Good afternoon, everyone, and welcome to Alpha Omega Semiconductor’s conference call to discuss fiscal twenty twenty five fourth quarter. I am Stephen Faleo, Investor Relations representative for AOS. With me today are Stephen Chang, our CEO and Yifeng Liang, our CFO. This call is being recorded and broadcast live over the web. A replay will be available for seven days following the call via the link in the Investor Relations section of our website.
Our call will proceed as follows today. Stephen will begin business updates, including strategic highlights and a detailed segment report. After that, Yifeng will review the financial results and provide guidance for the September. Finally, we will have a Q and A session. The earnings release was distributed over the wire today, 08/06/2025, after the market closed.
The release is also posted on the company’s website. Our earnings release and this presentation include non GAAP financial measures. We use non GAAP measures because we believe they provide useful information about our operating performance that should be considered by investors in conjunction with the GAAP measures. A reconciliation of these non GAAP measures to comparable GAAP measures is included in the earnings release. We remind you that during this conference call, we will make certain forward looking statements, including discussions of the business outlook and financial projections.
These forward looking statements are based on management’s current expectations and involve risks and uncertainties that could cause our actual results to differ materially. For a more detailed description of these risks and uncertainties, please refer to our recent and subsequent filings with the SEC. We assume no obligation to update the information provided in today’s call. Now I’ll turn the call over to our CEO, Stephen Chang. Stephen?
Stephen Chang, CEO, Alpha and Omega Semiconductor: Thank you, Stephen. Welcome to Alpha and Omega’s fiscal Q4 earnings call. I will begin with a high level overview of our results and then jump into segment details. We delivered fiscal Q4 revenue results at the high end of our guidance due to better than expected demand in computing, mostly driven by tariff related customer pull ins for PCs and strong sequential growth in AI and graphics chips. Our consumer segment also saw strong sequential growth related to wearables and gaming.
Overall, total June revenue was $176,500,000 Non GAAP gross margin was 24.4%. Non GAAP EPS was $02 Total revenue increased 9.4% year over year and 7.2% sequentially. As previously noted, licensing revenue wound down in the March. Excluding licensing and other revenue, our product revenue was up 13.7% year over year and 9% sequentially. Power IC revenue increased 25.8% sequentially and 30.2% year over year to a record quarterly high and now represents nearly 40% of total product revenue.
The richer mix of power IC benefits gross margins and comes from graphics, AI, gaming, and PC markets. On July 14, we announced an equity transfer agreement with a strategic investor to sell approximately 20.3% of outstanding equity interest of AOS’s joint venture in Chongqing, China for an aggregate cash consideration of $150,000,000 The sale is expected to provide AOS with significant additional capital to continue investing in technology, equipment, and acquisition of assets complementary to our business operations to support key growth areas. In summary, uncertainties regarding macro economy and geopolitics continue. Nonetheless, we are delivering on our commitment and advancing our transformation from a component supplier to a total solutions provider. Our goal is to leverage premier customer relationships to expand market share and increase BOM content with a broader portfolio.
With that, let me now cover our segment results and provide some guidance by segment for the next quarter. Starting with computing, June revenue was up 29.7% year over year and up 17.9% sequentially and represented the majority or 52.6% of total revenue. These results were solidly ahead of our original expectation for mid single digit sequential growth and more than 15% year over year. As mentioned earlier, the upside was fueled by tariff related pull ins from our PC customers and robust sequential and year over year growth in power solutions for AI and graphics applications. Revenue from AI and graphics reached a record high in the June driven by strong initial shipments for a new AI program.
However, we expect a digestion period in the September as that initial demand is absorbed. Meanwhile, designing activities for additional AI programs remains active and ongoing. In summary, we expect the competing segment to grow low single digits sequentially and mid teens year over year in the September. Sequential growth will be driven by PCs with graphics and AI demand remaining relatively strong, so down from June’s record levels. Tablet demand is expected to decline.
Overall visibility remains limited given the uncertain macroeconomic backdrop and evolving trade policies. Turning to the consumer segment. June revenue was down 5.8% year over year and up 23.9% sequentially and represented 15.1% of total revenue. The results were in line with our forecast driven by strong promotional activity in gaming as well as sequential growth from home appliances. Wearables were also better than expected.
For the September, we forecast a mid single digit sequential decline in the consumer segment driven by gaming and home appliances, but offset by continued growth in wearables. Next, let’s discuss the communication segment. Revenue in the June was down 1.7% year over year, down 5.2% sequentially and represented 15.2% of total revenue. The June results were below our guidance for flat sequential growth as a falloff from smartphones in China more than offset growth from Korea and our tier one US smartphone customer. Smartphone battery PCM revenue continues to outpace the overall market due to a combination of market share gains, a mix shift to higher end phones, and generally higher charging terms, driving increased bond content.
Looking ahead to the September, we anticipate more than 10% sequential growth for the communications segment primarily driven by our tier one US smartphone customer as they prepare for their next phone launch. Demand for China smartphone is also expected to grow sequentially, while Korea sustains the high level achieved in the June. Now let’s talk about our last segment, power supply and industrial, which accounted for 16.8% of total revenue and was up 7.3% year over year and down 9.8 sequentially. The results were below our flat to slightly down sequential forecast primarily due to weaker than expected demand from power tools and e mobility. ACDC power supplies and quick chargers for smartphones just increased sequentially, but it was not enough to offset the weakness elsewhere.
As stated before, we are now seeing increases in quick charges due to increased BOM content driven by higher charging terms. For the September, we expect revenue to grow mid single digits sequentially for the power supply and industrial segment, primarily driven by a slight pickup in e mobility offset by lower ACDC power supplies. In closing, we are pleased to report that June results landed at the high end of our guidance fueled by strong demand across AI and graphics, gaming, wearable and tariff related PC pull ins. These results highlight the strength of our diversified portfolio and our ability to execute amid dynamic market conditions. Looking ahead to the September, we expect further growth driven by PCs, smartphones, and wearables as we continue to be excited by the expanding opportunities in AI and graphics.
The geopolitical and macroeconomic environment remains fluid as we actively monitor evolving trade policies, capture pull in related opportunities, and collaborate with customers to minimize disruptions. Our business fundamentals remain strong, anchored by differentiated technology, a broadening product portfolio, and deep relationships with leading global customers. We believe calendar twenty twenty five will be a year of growth supported by expanding end market exposure, share gains and rising bond content. While near term uncertainties persist, we remain focused on execution, innovation and delivering sustainable value for our stakeholders. With that, I will now turn the call over to Yifan for a discussion of our fiscal fourth quarter financial results and our outlook for the next quarter.
Yifan?
Yifeng Liang, CFO, Alpha and Omega Semiconductor: Thank you, Stephen. Good afternoon, everyone, and thank you for joining us. Revenue for the June was $176,500,000 up 7.2% sequentially and up 9.4% year over year. In terms of product mix, DMOS revenue was $107,300,000 up 0.4% sequentially and 5.1% over last year. Power IC revenue was $68,700,000 up 25.8% from the prior quarter and 30.2 from a year ago.
Assembly service and other revenue was $500,000 as compared to $400,000 last quarter and $1,400,000 for the same quarter last year. We did not have any license and engineering services revenue this quarter as the related contract was completed in mid February. This compares to $2,800,000 in the prior quarter and $5,100,000 in the same quarter last year. Non GAAP gross margin was 24.4% compared to 22.5% last quarter and 26.4% a year ago. The quarter over quarter increase was primarily impacted by the mix improvement.
Non GAAP operating expenses were $40,900,000 compared to $39,700,000 for the prior quarter and $39,300,000 last year. The quarter over quarter increase was primarily due to higher R and D engineering expenses. Non GAAP quarterly EPS was $0.2 compared to negative $0.10 per share last quarter and $09 per share a year ago. Moving on to cash flow. Operating cash flow was negative $2,800,000 including $2,700,000 of repayment of customer deposits.
By comparison, operating cash flow was $7,400,000 in the prior quarter and $7,100,000 last year. We expect to refund $5,000,000 of customer deposits in the September. EBITDAS excluding impairment of equity investment for the quarter was $10,500,000 compared to $15,200,000 last quarter and $16,000,000 for the same quarter a year ago. Now let me turn to our balance sheet. We completed June with a cash balance of $153,100,000 compared to $169,400,000 at the end of last quarter.
Net rate receivables increased by $6,300,000 sequentially. Day sales outstanding were fifteen days for the quarter compared to eleven days for the prior quarter. Net inventory increased by $1,600,000 quarter over quarter. Average days in inventory were one hundred and twenty six days for the quarter compared to one hundred and twenty nine days for the prior quarter. CapEx for the quarter was $14,300,000 compared to $8,100,000 for the prior quarter.
We expect CapEx for the September to range from $11,000,000 to $13,000,000 A few words about our joint venture in Chongqing, China. On July 14, we signed an equity transfer agreement to sell 20.3% of the outstanding shares of CQ JV for $150,000,000 in cash and we expect this deal to be completed in the next few months. This transaction demonstrated our commitment to the ongoing value creation for our shareholders. With this sale, our ownership in CQ JV will reduce to 18.9% from 39.2%. CQ JV will remain as an important wafer and packaging supplier for AOS.
After this transaction, the new investor plans to inject significant amount of capital into CQ JV to further expand its capacity. Based on the evaluation of this sale, we recorded an impairment charge of $76,800,000 in the June on The U. S. GAAP basis. This impairment charge partially reversed the $358,700,000 net gain that we recorded back to December 2021 after we sold 3.2% equity interest in CQ JV for $26,300,000 cash.
With that, now I would like to discuss September guidance. We expect revenue to be approximately $183,000,000 plus or minus $10,000,000 GAAP gross margin to be 23.8% plus or minus 1%. We anticipate the non GAAP gross margin to be 24.4% plus or minus 1%. GAAP operating expenses to be $47,500,000 plus or minus $1,000,000 Non GAAP operating expenses expected to be $41,000,000 plus or minus $1,000,000 Interest income to be $500,000 higher than interest expense and income tax expense to be in the range of $1,000,000 to $1,300,000 With that, we will now open the call for questions. Operator, please start the Q and A session.
Jason, Conference Moderator: Our first question is from David Williams with Benchmark. Your line is open. David Williams, your line is open. Our next question is from Jeremy Kwan with Stifel. Your line is now open.
Jeremy Kwan, Analyst, Stifel: Yes. Good afternoon. Maybe if you could provide a little bit more color on the computing segment. Looks like, you know, that was very nice to see. It was, quite strong, especially on the AI and graphics.
Can you help us understand, the digestion that you mentioned? Is that related to the tariff pull ins more generally, or is that related to the, you know, strong initial shipments, of the new AI program? And any, you know, color you can provide in terms of the AI contribution this quarter and and how you see that going for the next couple of quarters would be very helpful.
Stephen Chang, CEO, Alpha and Omega Semiconductor: Hi, Jeremy. So, certainly, we’re excited about our AI and graphics business. This is something that’s been you know, we’ve been building upon and expanding in in our advanced computing area. And, and in terms of the digestion portion, and this is reflection of, some of the a one of the AI programs that we, started shipping into, in the last quarter. The we we ship into it for a certain program, and we we expect to take a little bit longer for that initial shipment to be digested.
But at the same time, you know, we’re also and we commented in the column that, you know, we are excited that there are there are additional programs that we continue to be designed into, that will help with that with that digestion. And at the same time, we already are seeing fresh, orders as well, forecast and backlog coming in for some of those new programs. So, you know, again, you know, we’re we are going after multiple types of projects here when it comes to AI. And and this is in addition to what we’re doing on the graphic side. On the graphic side, actually, you know, we were you know, we report also that, you know, we that is also fairly strong and I would say better than our original expectations, with good share, at the add in card makers, for the graphics cards.
So we started, both of our AI as well as graphics business.
Jeremy Kwan, Analyst, Stifel: Great. And that’s very helpful. And can you help us quantify this maybe in qualitative terms, like how much, your total AI is is as a part of the consumer segment, or maybe how much it drove growth in the current quarter, and and maybe how you see that, shaping out over the next, you know, maybe call it twelve to eighteen months.
Stephen Chang, CEO, Alpha and Omega Semiconductor: Yeah. That we tend to look at both graphics and AI together when it comes to because they’re these products are pretty are pretty similar when it comes to both the controller as well as the the driver MOS that we’re selling as a total solution. So those two together is somewhere on the neighborhood, maybe around 25% of computing these days.
Jeremy Kwan, Analyst, Stifel: Great. That’s very helpful. And maybe if I can ask a question on the gross margin. I understand that, you know, the richer mix kind of helped with, the richer mix of the Power helped with gross margins this quarter. It’s it’s kind of, maybe flat next quarter.
You know, revenues are a little bit higher. Can we infer from that that maybe the Power IC mix, you know, shifts down a little bit here? Can you just help us understand kind of the dynamics, near term and and how you see this, looking out, again, twelve to eighteen months, especially as, you know, some of these newer, richer, higher value products, continue to ramp? Thank you.
Yifeng Liang, CFO, Alpha and Omega Semiconductor: Sure, Chun Bin. Yes. In the June, you know, our gross margin improved quarter over quarter pretty nicely. So it was back up to the December level. So the primarily because of the better mix.
Keep in mind, the June, we did not have any license and engineering service revenue compared to in the March. So that contract twenty four month contract expired in mid February. So this in terms of September guidance flat compared to the June on a gross margin basis. Basically, reflected similar mix product mix and similar production level. And then, I mean, that’s a revenue.
Yes. That was little bit higher compared to the June. So we still have revenue inventory and also other inventory we purchased from third party foundries and subcontractors to support. So overall, we see at this point, we see flattish gross margin in the September.
Jeremy Kwan, Analyst, Stifel: And beyond the September, how should we think about gross margins, especially, we are you expecting the mix to continue increasing or to be more increasingly favorable? Just any kind of color you can provide on that would be helpful.
Yifeng Liang, CFO, Alpha and Omega Semiconductor: Sure. I mean, we don’t give a longer term guidance and then I mean, we only guide one quarter at a time. For the overall, yes, I mean, as our revenue continue to grow, then I would expect in the growth area, I would expect we can we expect to see a better product mix.
Jeremy Kwan, Analyst, Stifel: Got it. And one last question if I could. Just thinking about, you know, the, the sale or the transfer of, you know, portion of your whole JV holdings, that $150,000,000, you know, can you maybe rank order your priorities in terms of, you know, how you how we you’re thinking about CapEx, OpEx, maybe some m and a? You know, is there any thought as to, you know, shareholder returns? Yes, just any kind of indication about how you’re thinking about that cash inflow?
Yifeng Liang, CFO, Alpha and Omega Semiconductor: Sure. First of all, mean, this $150,000,000 cash deal, we expect to be completed in the next few months. I mean, probably by the end of this calendar year. And then the first payment and we can expect it probably in the September and then rest of the money expected to come in the December. In terms of use of cash, mean, we definitely will invest in our business growth and we do see quite a bit growth opportunities ahead of us.
So yes, we’ll invest in our technology in our talents and then expanding our capacity. And then I mean, yes, M and A is also on the the the plan. And, you know but that one is depends on the opportunity. They use the that yeah. And then I’m sure our board will evaluate in in terms of return capital to to investors.
And so, you know, that’s all on the on the play.
Jeremy Kwan, Analyst, Stifel: Great. Thank you very much.
Yifeng Liang, CFO, Alpha and Omega Semiconductor: Thank you.
Jason, Conference Moderator: Our next question is from David Williams with Benchmark. Your line is now open.
David Williams, Analyst, Benchmark: Hey, take my questions and apologize for the first issue there. Look, I’m of following up on the last question on the JV. If you kind of think about your balance sheet now, it feels like and you talked about some of utilization and third party foundries and that’s provided some nice flexibility in the past. But I wonder how you think about adding or bringing in additional capacity internal to help you drive the margin profile as you kind of scale the business. Is that the place you want to be?
Or would you prefer to have this kind of even split between third party and internal and the JV?
Yifeng Liang, CFO, Alpha and Omega Semiconductor: Sure. I mean, this definitely I
Yifeng Liang, CFO, Alpha and Omega Semiconductor: mean, this $150,000,000 transaction definitely will bring in, you know, more capital to us and then and also increases some flexibility in terms of where we want to set up our supply. Yes, we’ll continue to evaluate both internal production and purchasing from third party foundries. It depends on our needs. Sure. I mean, after this transaction, I mean, our balance sheet definitely got strengthened.
You know, we we would have quite a bit liquidity and also I mean, we created quite a bit value for our investors. Mean that’s if you look at this deal and then in the past and we recorded 300,000,000 our balance sheet in this equity investment. Throughout the years, including this deal, we already realized about $176,000,000 or so cash and then still own 18.9% even after this transaction. So I mean, I would say that, yes, this deal definitely created a of value for our investors.
David Williams, Analyst, Benchmark: Yes. No doubt, if my memory serves me correct, you were 30,000,000 to $35,000,000 total, including equipment and some cash. Is that right?
Yifeng Liang, CFO, Alpha and Omega Semiconductor: We invested $35,000,000 cash plus some used assembly equipment.
David Williams, Analyst, Benchmark: Yes, that’s a that is a heck of a return. So congrats on that. Good. Thanks for the color. And I guess maybe as you think about your internal capacity and tariffs and then shipping, just kind of given how much of your customer base ends up in Asia, how do you think the tariffs are impacting your local manufacturing capacity?
Is that is it a bigger challenge for you than maybe being outside of the country and moving outside largely? And just maybe what your exposure do you think is tariffs on that side of the house?
Yifeng Liang, CFO, Alpha and Omega Semiconductor: So far, mean, the direct impact from tariff is us is not that significant since we don’t ship a whole lot of products to The U. S. So from that front, right now was okay, but then this geopolitical and trade tension that you do play some uncertainties here. So we’ll adjust our supply chain along with our customers. And so basically, want to support our customers.
So wherever our customers are located, we want to support them.
David Williams, Analyst, Benchmark: Great. And maybe, Stephen, how do you or maybe if you think about how your customers have been reacting, are you do you sense that there’s more cautiousness out there in terms of the demand side and kind of where things lead? Do you feel like people are generally feeling better about the second half in from the underlying demand side?
Stephen Chang, CEO, Alpha and Omega Semiconductor: I think it’s that the answer is different, depending on which market you’re looking at. In terms of the the, the tariff impact, we see that on the demand side more prominently in the computing side when it comes to notebooks and desktops over there. And we are, you know, we’re we’re we are still dealing with how with how to support the pull in efforts and and with the with the demand being pulled in by our customers in advance of any kind of policy change when it comes to tariffs. So as of right now, our customers are still wanting to to produce as much as they can and get things into get things produced and onto a boat before the tariffs change. So that’s more and more prominently so in in the PC market.
We don’t really see the tariff impact in other areas. The others are more other impacts. Of course, anything with AI is is definitely still very hot. And graphics still continues to be strong as well too since, you know, that the cards graphics cards just launched at the beginning of this year. The AI programs are just starting up also, so those are those are still, you know, fresh, new projects.
Smartphones, we’re heading into the peak season with The US and The Korea smartphone maker also going into peak production. So those are seasonal effects that that we’re seeing now.
David Williams, Analyst, Benchmark: Great. Thanks so much for the help. Certainly appreciate it, and best of luck on the quarter.
Stephen Chang, CEO, Alpha and Omega Semiconductor: Thank you, David.
Jason, Conference Moderator: It looks like there are no more questions. So I’ll pass the call back over to the management team for closing remarks.
Investor Relations, Alpha and Omega Semiconductor: Great. Before we conclude, I’d like to highlight a few upcoming investor events. The management team will be participating in the sixth annual Needham Virtual Semiconductor and Semi Cap one on one conference on August 21, the twenty twenty five Evercore Semiconductor IT hardware and networking conference on August 26, and the Jefferies Semiconductor IT hardware and communications technology conference on August 27. Both of those are in Chicago, Illinois, as well as the Benchmark twenty twenty five Tech Media and Telecom Conference on September 3, and PD Securities Technology Growth Cap Summit on September 4. Both of those are in New York City.
If you wish to request a meeting, please contact the institutional sales representative at each sponsoring bank. This concludes our earnings call today. Thank you for your interest in AOS, and we look forward to talking to you again next quarter.
Yifeng Liang, CFO, Alpha and Omega Semiconductor: Thank you. Thank you.
Jason, Conference Moderator: That concludes the conference. Thank you for your participation. Enjoy the rest of your day.
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