Q1 2023 Masimo Corp Earnings Call
[music].
Yes.
Good afternoon, ladies and gentlemen, and welcome to Massimo <unk> first quarter 2023 earnings conference call.
The company's press release is available at Www Dot Massimo talked mom at this time all lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.
I am pleased to introduce Eli Kangaroo minute, Massimo <unk>, Vice president of business development and Investor Relations.
Thank you and Hello, everyone. Joining me today are chairman and CEO , Joe Kiani, and executive Vice President and Chief Financial Officer Micah Young.
This call will contain forward looking statements, which reflect management's current judgment, including certain of our expectations regarding fiscal year 2023 financial performance. However, they are subject to risks and uncertainties that could cause actual results to differ materially.
Risk factors that could cause our actual results to differ materially from our projections and forecasts are discussed in detail in our periodic filings with the SEC you will find these in the Investor Relations section of our website.
Also this call will include a discussion of certain financial measures that are not calculated in accordance with generally accepted accounting principles or GAAP. We generally refer to these as non-GAAP financial measures. In addition to GAAP results. These non-GAAP financial measures are intended to provide additional information to enable investors to assess that.
Company's operating results in the same way management assesses such results management uses non-GAAP measures to budget evaluate and measure the company's performance and sees these results as an indicator of the company's ongoing business performance. The company believes that these non-GAAP financial measures increase transparency and better reflect.
The underlying financial performance of the business.
Therefore, the financial measures, we will be covering today will be primarily on a non-GAAP basis unless noted otherwise further we will also be referencing pro forma financial measures, which include historical results for sound United Prior to the acquisition date of April 11th 2022 in our presentation today.
We want we will once again be referring to this business as our non health care segment.
Reconciliation of these measures to the most directly comparable GAAP financial measures are included within the earnings release and supplementary financial information on our website <unk>.
Investors should consider all of our statements today together with our reports filed with the SEC, including our most recent Form 10-K and 10-Q in order to make informed investment decisions. In addition to the earnings release issued today, we have posted a quarterly earnings presentation within the Investor Relations section of our website to supplement that.
Content, we will be covering this afternoon I'll now pass the call to Joe Kiani. Thank you. Thank you Leigh good afternoon, and thank you for joining us for Massimo the first quarter of 2020 tweak earnings call.
We started the year with solid performance and are excited about the many new products coming out of our research and development pipeline this year.
A consistent focus on life, improving innovation continues to drive growth in our professional health care consumer health and consumer markets.
And now supported by the scale and infrastructure of our Massimo consumer business, our health and health care innovation is going to reach people from all walks of life.
Our consolidated revenues for the first quarter reached $565 million.
We delivered health care revenues of $347 million and consumer revenues of $218 million.
New customers in our pulse oximetry business and increasing traction for Rainbow and advanced parameter products strengthened our healthcare revenues this quarter.
In fact this was the best first quarter in our history for new conversions of hospitals to Massimo.
In addition to Rainbow blood constituent monitoring, which has now become over 10% of our health care revenue, we had solid growth in our <unk>.
Deadline and old tree brain monitoring and normalized cap Naga fee and gas monitoring products.
Robust growth for <unk> led the performance of our consumer business, along with a strong market reception for some recently launched products.
Many consumer facing companies struggling post COVID-19, our consumer business remains on track.
Meanwhile, we are leveraging our unique combination of signal processing physiological monitoring audio and automation technology capabilities to launch a series of new and innovative products to revolutionize consumer health.
On that point later in the call I'll update you on the recent launch of our store baby monitor and opioid halo as well as some of the other new products planned for this year that we expect will contribute to our long term success with that I'll pass it to Micah to review our first quarter.
Our results in more detail and provide an update on our 2023 financial guidance.
You, Joe and good afternoon, everyone for the first quarter, we achieved consolidated revenue of 565 million and non-GAAP earnings per share of <unk> 87.
For our healthcare segment first quarter revenues were $347 million, representing 16% constant currency growth.
Recall that our first quarter 2022 revenues were adversely affected by supply chain challenges that produced a shortfall in that period and resulted in growth of only 3%, which was subsequently recovered in the second quarter of last year.
We shipped over 77000 drivers in the quarter and we are on track to ship over 300000 drivers. This year at the end of the first quarter, we estimated that our installed base has grown by 7% over our installed base at the end of the first quarter of 2022.
As Joe mentioned, our healthcare revenue growth was driven by strong performance from our Rainbow blood constituent monitoring said line and all three brain monitoring and <unk> normalized <unk> and gas monitoring products.
For our non healthcare segment first quarter revenues were $218 million representing <unk>.
Expected decline of 9% on a pro forma and constant currency basis.
This was in line with our guidance as this business faced a tough year over year comparison due to the fulfillment of backorder products in the prior year quarter that drove 22% constant currency growth right before the acquisition closed.
<unk>, including headphones and ear buds remain a key category for growth.
<unk> sells more than doubled in the first quarter versus the prior year period, primarily driven by the Bowers <unk> Wilkins headphone franchise.
We're pleased with the strong growth we're seeing in seeing in this category. We expect the launch of the denim Pearl AAC ear buds later this year to further elevate our <unk> business as we bring truly differentiated technology to our consumer audio brands.
Now moving further down the P&L for the first quarter of 2023, we realized consolidated non-GAAP gross margin of 52%. This includes gross margins of 62% for our health care business and 36% for our non healthcare business.
Consistent with our guidance, we expect to see gross margins steadily rise over the course of 2023 as our supply chain continues to stabilize.
For our consolidated business, our non-GAAP operating profit increased 8% to $76 million, which was a solid result, despite year over year currency headwinds and the elevated litigation costs associated with the trade secrets misappropriation trial against Apple.
And our non-GAAP earnings were <unk> 87 per diluted share, which included an increase of $11 million in interest expense over the prior year period related to the debt incurred for the acquisition and share buybacks.
To summarize we delivered first quarter results at the high end of our guidance is our healthcare business again realized steady gains in market share across our across the portfolio.
And our non health care segment, we saw an impressive growth from our <unk> products, despite a difficult year over year comparison.
And we have an exciting lineup of new products Rolling out this year that will help us advance our strategy drive long term growth and improve lives whether in the home or in the hospital.
Now I'd like to provide an update on our 2023 financial guidance for the full year 2023, we are maintaining our previous guidance ranges for consolidated revenue of $2 billion $415 million to $2 billion $460 million non.
non-GAAP operating profit of $400 million to $405 million and non-GAAP EPS of $4 70 to $4 80.
As we discussed last quarter, we are taking a disciplined approach to our product launches and leveraging Massimo consumer Massimo consumers capabilities and channels to maximize the impact of the incremental 100 basis points of promotional investment we are making.
For our healthcare segment, we are maintaining our previous revenue guidance of $1 $450 million to $1.465 billion, representing 8% to 10% constant currency growth for.
For the non health care segment, we are maintaining our previous guidance range of 965 million to $995 million, representing 2% to 5% growth on a pro forma and constant currency basis.
Please reference our earnings presentation on our Investor website for further details in conclusion, our outlook for 2023 reflects solid growth in our business, while incorporating prudent investments to support the new products, we will launch this year.
With that I'll turn the call back to Joe Thank you Mike.
I'm delighted to report that we received de Novo FTA approval for Massimo opioid Halo.
Our revolutionary product for the detection of opioid induced respiratory depression and people taking opioids at home.
Illicit opioid related deaths, Alright, then all time high and unexpected deaths from opioids, even in patients who are complying with recommended dosages are a significant problem in the U S.
Over 80000 people died due to opioid overdose.
We intend to play an active role in reducing these debts by alerting patients and their loved ones.
Opioid induced respiratory depression occurs.
Delorme functionality of opioid Halo provides an early warning of depressed respiratory function that should result in vulnerable patients being woken up and saved from a terrible fate and if not then in an alarm with location is sent to the nearest ambulance.
On May 1st we began marketing opioid halo to drugstores and addiction treatment centers.
We're going to do our best to make sure. There is awareness of opioid halo as we believe it used it could save people from opioid induced respiratory depression.
With the transition of naloxone brands to over the counter status.
Large retailers are creating display areas to promote opioid safety and awareness within their stores and we expect opioid halo, which has over the counter and prescription clearance to become part of that initiative.
On May 3rd we launched stork at the 2023 Kids Expo in Las Vegas.
We had very strong interest from major retailers, including what I'm, Massimo consumers largest customers, which will carry storage and give it a very prominent display location and stores.
We're currently selling different configuration of storage.
The Massimo <unk> store Dot com website, and expect to announce important retail channel presence as well as large online baby registries for stork over the next six months.
The marketing team at National Consumer is doing an excellent job of gaining attention historic both online and in traditional retail channels.
These efforts should accelerate adoption of the product in the second half of this year.
As one of our first consumer health.
Product launches stork is creating a great template for how our teams can leverage our integrated global brand and marketing framework, which we will.
Rapidly refined and replicate as we learned from the store rollout and launch more consumer health products.
We will also soon launch our first <unk> based on our adaptive acoustic technology platform the <unk>.
<unk> platform creates personalized listening profiles for each user.
Customizing the sound spectrum for each person's unique ear architecture, and hearing sensitivities to ensure that no instrumental detail or sound subtlety goes unheard.
These next generation Airbus will be marketed as the dennen Pearl and Pearl Pro to leverage denizens heritage of World Class acoustics.
And we have already received very strong interest from retailers that gives us confidence in our rapid sales ramp.
Shifting to Wearables are W. One watch is gaining traction as Cambridge University hospitals in the UK and surety Chairman Health Center in Berlin has expanded their telehealth programs with Massimo W. One.
Last but not least Massimo freedom watch with Android operating system is slated for sale in the second half of the year.
Showed freedom at the BNP Paribas tennis tournament or March and have begun pre sales on our E Commerce site.
In addition, freedom sleep band will round out our portfolio of Wearables, which addresses a range of distinct consumer health needs at various price points and can be display together and retail stores for marketing synergy hopefully prior to the Christmas holiday season.
We also continue to make progress building our home based medical data ecosystem that connects our wearables and remote monitoring products and services to heal devices, allowing us to feed data from the wearables into a secure health cloud.
We grew the number of keyless connected devices by approximately 180000 in the first quarter.
We intend to grow Massimo by making a real difference in People's lives and hospitals and home.
We can't do that without the dedication and commitment of our team and support of our shareholders.
For the first time since we took massive public in 2007, we will be engaged in a proxy contest.
We encourage all of our shareholders to book the outcome will be consequential for our company's mission strategy and guiding principles, which have been incredibly important to our success with that we'll open the call to questions operator.
At this time I would like to remind everyone in order to ask a question Press Star then number one on your telephone keypad, we'll pause for just a moment to compile the Q&A roster.
Our first question comes from Maria <unk> with GTI Keith Your line is open.
Hi, Thank you so much for taking the questions and congrats on a very strong start to the year. Thank.
Thank you Maria.
Yeah I wanted to start here with just a basic question about the health care business I think last quarter, you mentioned that there had been some encouraging pricing trends and contract renewals just wanted to hear what drove some of the strength that you saw in health care I know you mentioned some of the parameters, but wonder if there are other.
Staying about trends that you can also point to you.
Well I.
I don't know if will sustain this but Q1.
Was our biggest quarter ever in converting hospitals to Massimo set pulse oximetry, new customers I think it was twice the rate that we normally do.
So thats very encouraging.
Pricing has stabilized.
Cost of goods has stabilized.
And one of the other things that we're encouraged about is the traction that Rainbow is getting noninvasive hemoglobin P V I a.
Outside the U S R I.
And our cap Naga free or three and said line of businesses. So.
We see that all really really positive the only thing is from the best.
Hmm.
Yes, the best estimate that we have census has returned to 2019 level, but it hasnt grown as the 2019 level, where normally each year census.
Growth by 1% to 3% from the best we can see we're finally back at 2019 level. So all in all it's all bodes well.
We hope that eventually.
Covid related deaths that affected a lot of elderly people that would use hospitals regularly in the last years of life.
<unk>.
Go through and the new norm will begin.
And with the huge conversions, we've had this quarter in the past couple of years. We think overall will be ahead of things. So I hope that helps.
Yeah. It does thank you sounds like it's heading in the right direction.
I wanted to ask my follow up here then on opioid Halo.
Congrats very much on getting through the FDA with that.
And great timing with the naloxone going OTC as well.
Wanted to sort of understand how you think about your go to market strategy, you mentioned that some drug stores will be offering halo as part of the over the counter naloxone effort.
Is there a plot to try to get reimbursement at some point I think I recall out of pocket of $250, which is more than most people spend in the drugstore. So curious about the business model longer term here then.
Yes longer term, we do hope to get reimbursement, but that might take a few years in the meantime.
We're doing a multi pronged sales approach.
From over the counter.
Drug stores to reaching out to the kind of physician offices that do surgeries.
Their offices and send people home with opioids to make them aware of it.
<unk>.
We're reaching out to states that have received settlement money from the opioid companies.
That want to use that money for the greater good of people that are potentially addicted to opioids already.
So I think hopefully with all of that until we do get reimbursement we should have.
Strong adoption and sales.
Alright that all make sense, Joe Thank you so much.
Q.
Our next question comes from Matt Taylor with Jefferies. Your line is open.
Okay.
Okay. Thanks for taking the question and congrats on a good start to the year here.
So I guess I was hoping to ask a little bit about.
Current state of litigation, obviously, we saw the the myths trials I was hoping you could update us on what you think ultimately happens there and maybe just remind us about what's coming up here with the ITC and the other trials you have in the future.
Sure sure Big picture, we have five separate litigations with Apple.
Darted off with the patent and trade secret lawsuit, we filed here in Orange County, which got split into two the trade secret case in a patent case as opposed to resume post P tab rulings and appellate court decisions.
Then we filed the ITC case.
For the International Trade Commission to stop the importation of foreign manufactured products that infringe patents.
Then apple suit us in Delaware for patent infringement, and we counter sued them in Delaware for patent infringement and antitrust and unfair competition.
So with the first two things of course, the ITC case, you know we won the first stage of that we're waiting for the commission to rule. The commission delayed their ruling right now we expect middle of July to get a decision and assuming it's favorable and president Biden doesn't stop it we could.
C.
The exclusion of the Apple watch with pulse oximetry and September timeframe.
Pat under the trade Secret case, we just had an Orange county, it was quite quite three to four week process to evidence came in incredibly strong.
Devin as came in that showed in 2012, Apple decided to make a watch they quickly decided the most important feature of that watch would be health sensing with pulse oximetry.
They realize they did not know how to do pulse oximetry. So they started a project called.
Rover to look at all the companies in the world that do pulse oximetry.
Quickly they decided Massimo and circle Corp, with the two standout pulse oximeter companies both run by me and my trusted technical.
VP was Marcello lumbago, so they recommended wildly recruit some of my team to Tim Cook to acquire Massimo.
Massimo would be a great acquisition, not just because of our technology and our people that because I could take over their health care business and they also.
We're shut down Tim Cook said it just all came in in front of the jury Tim Cook said, we don't do acquisitions like this and then they looked at doing maybe a joint development with us while still recruiting our people although their head of BD kept warning them. This is not good karma, we shouldn't be doing this but they were doing good.
Right around that time, where they were looking at joint development.
The CTO at Circle core Marcellus Omega, who as they are identified as my confidence finally responded to Apple and decided you know what yes, maybe I will join you guys and bring all of this stuff to you. If you give me a high level technical executive role.
Which at that time, it looks like that stopped their business development front with us and instead.
Steve Holt, telling who apparently had $3 to 4000 engineers reporting to him and to watch started the confidential project to go one layer lower they had Marcello now our CTO that had Michael O'reilly our CMO.
Which by the way as evidenced came and they both took our trade secrets to Apple and they also.
Unfortunately decided to go one layer lower.
Attract our engineers and directors and.
They did they hired between 20 to 30 additional people.
The jewelry got to see some of that evidence and they also got to see that Apple launched their pulse ox in 2020, knowing that it wasn't good enough to get FDA clearance, but because of the COVID-19 chaos. They call that they thought <unk> would help them gain market share from fitbit.
Which.
They launched it.
Probably the worst thing is about 100 million people now have pulse ox is in the back of their watch it doesn't really work. Their goal is to just get two measurements on 90% of the people each day and they fell short of that they've got a 37% of the time two measurements each day.
So all of that stuff was in front of the jewelry.
How they took several of our trade secrets.
Before the jewelry went to deliberate the judge I think believing we had a jewelry that was going to go all the way with US took away our business trade secret case, which we disagreed with but we're going to have to wait for appeal on that.
But despite all of that unfortunately, the jewelry.
Hung up.
Isn't as though it's been reported there was six months to one I can't get into more details on that but.
It wasn't like that.
But unfortunately, we did hit that so at this point.
I guess in life, you don't get many do overs were going to get another dual [laughter]. So we will be trying this case and hopefully.
Given how good the case came and how everyone assumed it would go we expect next time, we'll get very different results.
Thanks for that great answer any thoughts on the timing of that coming back around.
No. We don't know it's up to the judge it could be two to three months to another year, we don't know.
Okay cool, thanks, very much for that answer.
Thank you.
Our next question comes from Michael <unk> with Wolfe Research Your line is open.
Hey, good afternoon, and thank you for taking the questions maybe.
Our guidance question.
The affirmation for the year on <unk>, so as I look through the deck I see a modest reduction to the consumer gross margin and Kurt.
That's the stand out I guess for Mike any other twists and turns within the guidance affirmation, we should be mindful of here.
No. So Michael the only thing we held of course.
Guidance on top line bottom line EPS and operating profit, but we did have.
If you look at the the slightly lower on a full year for the consumer business on gross margins that just reflects.
In the first quarter, where we saw some lingering spot buys that impacted that business.
And we really didn't change the outlook for the last three quarters, but let that kind of flow through the year and.
And we also we did a very good job of managing expenses in the first quarter to offset that so you'll see a little bit softer gross margins, but also improvement on lowering operating expenses for the year reflected in that guidance, but we're seeing overall, Michael we're seeing.
Stabilization of the supply chain.
The trends that we're seeing exiting the first quarter.
A good signal for us we still expect a steady rise in gross margins throughout the rest of this year.
Q1, being the low point.
If I can follow up.
Another guidance question or.
Modeling question <unk> any any feel for <unk> modeling specifically I.
Well I guess, both segments, but also kind of want to make sure. We're all understanding of the.
Unusual year on year comps given.
42 per cent growth in Q1 last year, and then 10% growth in Q2, which is above.
Trend line, just because of the fulfillment of those back orders so I.
I think the first half you'll see that we're up against some tough comps.
And still up against tough comps and Q2, but then those comps should ease and normalize out in the back half of this year.
Our next question comes from Jason Tech name with Piper Sandler Your line is open.
Hey, guys good afternoon.
Joe or Mike I'm wanting to start on maybe some of the new products. It really is as we think about Halo store W. One.
I know this is a funding year for for a lot of these new products really a building year to get.
These products off the ground.
But can we talk about maybe the intermediate term economics on the hardware help us with how you're thinking about margins in one volume to me to reach with Halo or store or W. One in order for those offerings to be breakeven and then you know maybe from a timing perspective.
You're thinking about breakeven in 2024 or is this more of a a multiyear process to get to that part of the business profitable.
Well, we high level, we expect all of the business to be profitable from the day, we launched them, we're not seeing margin a limitation despite manufacturing that there'll be ones right here in Irvine.
We expect good margin on those micro do you want to add anything to that yeah. No I think Jason's you know we would expect.
Back to Joe's point, I mean, those gross margins should be or the margins on those products should be supportive of our overall gross margins for the company. So to Joe's point. They wouldn't we don't expect those to be dilutive. In fact, if we can start to see you know drive some subscription type revenues around some of them.
Those products as well over time, those you know we could see even steady improvement above the corporate average so but we are making some investments I think I mentioned in my prepared remarks about 100 basis points of promotional investments this year and and you know we're going to be very prudent and thoughtful about that as we invest going forward and.
And we want to see good results and will continue to make the right investments to grow that business.
Okay I guess.
Think about it maybe we're talking about these differently in terms of how we're bucketing the.
Profitability, but.
To say that they're profitable and your one we're talking about like like more than $20 million in revenue from these products. This year, which I don't think is what you're saying microphone.
I don't want to put words in your mouth, but I'm sorry go ahead.
No that's not I I don't think that's what we're saying I think what Joe's referring to this that it would be supportive of our gross margins you know in terms of Ah breakeven I mean, we're going to have to see how that plays out but we're we're making about 100 basis points of investment this year and and you know we have high expectations for these products, especially.
We think we'll see some meaningful revenue is going into next year that could drive some leverage in that business and and hopefully return profitability in within the next year or so yeah.
And I think also is important to note that we've done advertisements before and we've done every year practically it since we launched our product.
You advertise even for a certain product.
It does list.
All boats and other areas.
For example, during Covid, we were advertising or Covid product I bought the color price said well it actually helped Massimo hook grow.
Yes, I think I don't think we're looking at losing money with any of this.
[laughter] Nope no fair enough.
I think the.
The one thing that's really hard to hard to tease out or tell right. Now is this is these are entirely new categories that you're an entirely new channels that your marketing and selling into which I think is why it I'm just trying to gauge all the sensitivity around spending and then the uptake, but it sounds like that's right now not not expected to be an issue or a problem, but maybe.
Be shipped into a different follow up here for Jason Let me just from it maybe maybe that's actually not a bad thing you're raising if maybe this confusion out there remember it that's why we bought sound United.
There's four to 500 salespeople it sounds United that were there when we acquire them that are gonna be helping these new products. So while it is a new category from Massimo for the combined entity, we're not hiring people to support these launches.
<unk>, that's why we want young young.
Yeah.
Understood.
And what's more there maybe and followed shop line here, but.
Competitive perspective.
I guess I'm just wondering if you seen any changes in practices or tactics with your main patient monitoring competitive out there and evaluate some alternatives to its business.
Not just you got asked me to speak ill of Ah of appear but you know is there a distraction with that group or have you seen him turn more aggressive just and any shifts in behaviour, there just with with that asset being up for potentially up for sale or being spun off.
Well it never helps to under estimate your competitors, but on the health care side.
I think they've tried everything they can't slow us down.
I hope to one they say that about the consumer side.
[noise], Okay. Thanks, guys.
And your next question comes from Jason Bedford with Alright change your line is open.
Good afternoon, just a couple of questions I guess just on the pipeline here.
Where do you stand with the timing of F. D. A clearance from both W. One in store and then just walk through the decision to launch dark with without clearance.
We don't know and we don't want to guess when they're gonna approve things. We're delighted that we got opioid halo cleared and we hope the restful clear as well.
But the decision to launch store it is because it's a baby monitor if you noticed we they are not making alarm monitoring claims or things like that and there was a significant business out there without making or needing to make those claims. So we decided to begin the sales of these products given that we were.
Seeing the high interest of the retailers, who we're talking to without making those claims but of course as soon as we get the F. D. A clearance we will announce that and I think it should help as well.
[noise] okay.
Just.
Off topic here or a different topic is there any way to parse out the incremental costs related to the Apple suit and one two and then just on the re trial from an expense standpoint of our most of these costs sunk or would you expect a similar stand on round too.
You know, we're not new to defending our I P. But we are new to.
People just exercising the hell out of the court with motions I think the number of emotions Apple filed that was leading up to just trade secret trial or about three times, what we used to so it's funny you say that cause I've been asking Mike [laughter] can we non-GAAP .
This extra stuff, that's really related to Apple is not a standard stuff whether he gets comfortable with that or are auditors get comfortable with that I don't know.
But it is really not normal.
Is there any way to quantify.
I think we have in the Wall Street Journal article I think I mentioned, we've spent $55 million up until now on the Apple litigation.
And of course, it's not just a trade secret case is to I T. C case in the patent case, but there's a lot more to go as I said, there's five cases, we've just begun on two of them.
So my Unfortunately, I think we're gonna spend spend over $100 million on these litigations and Jason just to clarify that's over since the inception of the cases, so it's over multiple years about three years.
Oh, thank you.
Our next question comes from <unk>, Matteson with need him and company.
Yeah. Thanks, I just had a few on the screen and watch so and I guess the bands as well for that matter, but you know I check out the website. It looks like it's got a thousand dollar price tag on it it seems pretty high compared to the competing products out there.
Just wanted to get your take on that especially since it's.
Assume that would require a subscription as well and then what's you said there was a lot of interest from the retailers in store or have you have you seen what's the interest level than in the bands and freedom.
Yeah.
We have three price points when it comes to the Wearables. The most expensive as freedom at about 1000. The next most expensive product is a W. One.
$500 and then the freedom band will probably be around $250.
So we'll have we'll have something that does violence sensing the exact same bias sensing for everyone. I believe so then it's just a matter of what features do they want and are they willing to pay for those features I've seen people get really excited about the privacy switch, which nobody else has.
So we'll have to see but as I've said before our customers that we're targeting are people that have chronic illnesses and that need a serious monitor that serious measurement and they wanted in a way that's unobtrusive. So.
You know time will tell where we go and as you know we are trying to manufacture these products in the U S, which makes the cost of goods greater than if we were doing them in China, but.
You know, we'll we'll we'll see how it goes.
Okay. Thanks for <unk>, our Conservative financial Officer, we haven't projected a lot of revenue for these things [laughter]. So we'll see.
Yeah, Yes, sure point, but and then just W. One in the health care settings are you seeing any signs of attraction, there with with that product and channel.
Well W. One right now is being really marketed by our hospital salesforce outside the U S and the U S was still waiting for F. D a clearance.
We had not begun putting there'll be one end of the consumer channel because we didn't want to consumers to think that is the one we have in mind and we want them to first know Massimo as freedom that is a much more beautiful design.
And it has a lot more features.
So now that we're have begun the pre sales on freedom, we're giving Ah our consumer business team the ability if they want to begin selling there'll be one to the channel. So that may start happening towards the second half.
Of the year.
Okay, and if I can just get.
Get one more in the same quarter. So I know there was another question, but I guess I want to get more specific the consensus I'm looking at Fox, that's five or 91 million of revenue in a dollar elevens EPS does that are you guys comfortable with that do you think the street is analysts have model that correctly for the second quarter.
Yeah I think.
Mike when I look at the numbers right now the it looks like there wasn't consideration for the seasonality of both businesses, where they may traditionally stepped down in Q2 two.
And you know the the cops from last year, if you as I mentioned before health care is up against the 19% comp.
On the growth rate last year in Q2, and Nonhealth cares up against a 10% comp and Q and Q2 last year. So I think you gotta look at that consider that we still will see pretty heavy year over year currency headwinds as well you know similar to what we saw in Q1 and then of course, the you know it.
Starts to turn I believe into more of a tailwind in the back half on currency, so make make sure that you're you're thinking through that as well.
Okay got it thank you.
Yeah, Yeah, but we reiterated the full year guidance. So while that's the quarters by that'd be exactly the way you guys have put out there we feel really good about the whole year.
Yes.
And I think that was our last question. We thank you for joining us today and I know you guys are gonna be spending a lot of time with.
Micah and Eli.
Look forward to talking to next quarter.
[laughter].
This concludes today's call you may now disconnect.
[noise]. Please wait the conference will begin shortly.
[music].