Q1 2024 Omnicell Inc Earnings Call
Sean: Good morning, ladies and gentlemen. My name is Sean, and I will be your conference operator for today. Please note that today's call is being recorded. All lines have been placed on mute to prevent any background noise.
Good morning, Ladies and gentlemen, my name is John and I'll be your conference operator for today. Please note that today's call is being recorded.
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 will now turn the call over to Kathleen limit Senior Vice President Investor Relations East go ahead.
Sean: After the speaker's remarks, there will be a question and answer session. I will now turn the call over to Kathleen Nemeth, Senior Vice President, Investor Relations.
Kathleen Nemeth: Good morning, and welcome to the Omnicell First Quarter 2024 Financial Results Conference Call. On the call with me today are Randall Lipps, Omnicell Chairman, President, CEO, and Founder, and Nchacha Etta, Executive Vice President and Chief Financial Officer.
Kathleen: Good morning, and welcome to the T cell first quarter 'twenty 'twenty four financial results conference call on the call with me today are Randall Lipps, Omnicell, Chairman, President CEO and founder and in charge of at our Executive Vice President and Chief Financial Officer.
Kathleen Nemeth: This call will contain forward-looking statements, including statements related to financial projections or other statements regarding Omnicell's plans, strategy, objectives, goals, expectations, products, or solutions, actions to streamline our international product line, a review of the business, or market or company outlook that are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied. For a more detailed description of the risks that impact these forward-looking statements, please refer to the information in our press release issued today, in Omnicell's Annual Report on Form 10-K filed with the SEC on February 28, 2024, and in other more recent reports filed with the SEC.
Kathleen: This call will contain forward looking statements, including statements related to financial projections or other statements regarding omni shelf plans strategy objectives goals expectations products or solutions actions to streamline our international product line holistic review of the business or market or company outlook.
Kathleen: That are subject to risks uncertainties and other factors that could cause actual results to differ materially from those expressed or implied.
Kathleen: For a more detailed description of the risks that impact. These forward looking statements. Please refer to the information in our press release issued today in the Omnicell annual report on Form 10-K filed with the SEC on February 28, 2024 and in other more recent reports filed with the SEC.
Kathleen Nemeth: Please be aware that you should not place undue reliance on any forward-looking statements made today. All forward-looking statements speak only as of the date hereof or of the date specified on the call. Except as required by law, we do not assume any obligation to update or otherwise release publicly any revisions to our forward-looking statements. Our first quarter results were released this morning and are posted in the Investor Relations section of our website at ir.omnicell.com.
Kathleen: Please be aware that you should not place undue reliance on any forward looking statements made today all forward looking statements speak only as of the date hereof or of the date specified on the call except as required by law, we do not assume any obligation to update or otherwise release publicly any revisions to our forward looking statements.
Kathleen: Our first quarter results were released this morning and are posted in the Investor Relations section of our website at IR Dot Omnicell Dot Com <unk>.
Kathleen Nemeth: Additionally, we would like to remind you that during this call, we will discuss some non-GAAP financial measures. Reconciliations of these non-GAAP measures to the most comparable GAAP financial measures are included in our financial results press release posted. With respect to forward-looking non-GAAP measures, we do not provide a reconciliation of these measures to the comparable GAAP measures, as these items are inherently uncertain and difficult to estimate and cannot be predicted on a GAAP basis without unreasonable effort. With that, I will turn the call over to Randall.
Kathleen: Additionally, we would like to remind you that during this call we will discuss some non-GAAP financial measures reconciliations of these non-GAAP measures to the most comparable GAAP financial measures.
Kathleen: Are included in our financial results press release posted.
Kathleen: With respect to forward looking non-GAAP measures, we do not provide a reconciliation of these measures to the comparable GAAP measures. As these items are inherently uncertain and difficult to estimate and cannot be predicted on a GAAP basis without unreasonable effort with that I will turn the call over to Randall Randall.
Randall A. Lipps: Thank you, Kathleen, and good morning, and thank you for joining us on the call today. I will walk through our solid financial performance for the first quarter of 2024 and provide an update on the current demand environment and our successful Illuminate 2024 customer event. Beginning with our results, our first quarter of 2024 came in above our previously announced guidance on several key metrics. Total revenues were $246 million.
Randall A. Lipps: Thank you Kathleen and good morning.
Randall A. Lipps: And thank you for joining us on the call today.
Randall A. Lipps: Total revenues in the quarter were $4 million above the top end of our guidance range, primarily due to solid execution and timing within both technical services and our advanced services. Non-GAAP gross margin for the first quarter was 39.8%, a decrease of 380 basis points from the prior quarter, primarily due to lower revenue volume leverage. Our first quarter 2024 non-GAAP earnings per share were $0.03. First quarter non-GAAP EBITDA was $11 million.
Randall A. Lipps: I will walk through our solid financial performance for the first quarter of 2024.
Randall A. Lipps: Provide an update on the current demand environment.
Randall A. Lipps: Our successful illuminate 2024 customer event.
Randall A. Lipps: Beginning with our results our first quarter 2024 came in above our previously announced guidance on several key metrics.
Randall A. Lipps: Total revenues were $246 million.
Randall A. Lipps: Total revenues in the quarter was $4 million above the top end of our guidance range.
Randall A. Lipps: Generally due to solid execution and.
Randall A. Lipps: And timing within both technical services and our advanced services.
Randall A. Lipps: non-GAAP gross margin for first quarter was 39, 8% a.
Randall A. Lipps: A decrease of 380 basis points from the prior quarter, primarily due to lower revenue volume leverage.
Randall A. Lipps: Our first quarter 2024, non-GAAP earnings per share were three set.
Randall A. Lipps: First quarter, non-GAAP EBITDA was $11 million.
Randall A. Lipps: First quarter 2024 non-GAAP EBITDA and non-GAAP earnings per share exceeded our outlook due to better than expected revenue, as well as strong cost and operating expense management. Since our last earnings update, we have retained an external management consultant to conduct a holistic review of our business with the aim of streamlining our operations and unlocking shareholder value. Today, we announce our intention to exit one international product line that was not delivering sufficient returns on our investment. This action was already under active consideration prior to hiring the external consultant.
Randall A. Lipps: First quarter, 2024, non-GAAP, EBITDA and non-GAAP earnings per share exceeded our outlook.
Randall A. Lipps: Due to the better than expected revenue as well as strong cost and operating expense management.
Randall A. Lipps: Since our last earnings update.
Randall A. Lipps: We have retained an external management consultant conduct a holistic review of our business with the aim of streamlining our operations and unlocking shareholder value.
Randall A. Lipps: Today, we announced our intention to exit one international product line, which was not delivering sufficient returns on our investments.
Randall A. Lipps: This action was already under active consideration prior to hiring the external consultant.
Randall A. Lipps: While this was a first small step, we are indeed moving forward with determination and urgency. Now, let's turn to the current macro environment and industry landscape. As we move into 2024, there are some reports pointing to encouraging signs that health system finances are beginning to stabilize. Hospital finances reflect a strong start to 2024 with calendar year-to-date operating margins approaching 5%, primarily due to accelerating outpatient revenues, lower contract labor spending, and lower average length of stay. At the same time, the interest rate environment remains challenging, with forecasts for rate reductions unpredictable.
Randall A. Lipps: This was a first small step we are indeed, moving forward with determination and urgency.
Randall A. Lipps: Now, let's turn to the current macro environment and industry landscape.
Randall A. Lipps: As we move into 2024, there are some reports pointing to encouraging signs that health system finances are beginning to stabilize.
Randall A. Lipps: Hospital finances reflect a strong start to 2024 with calendar year to date operating margins approaching 5%.
Randall A. Lipps: Primarily due to accelerating outpatient revenues lower contract labor spending and lower average length of stay.
Randall A. Lipps: At the same time, the interest rate environment remains challenging with forecast for rate reductions unpredictable.
Randall A. Lipps: And we continue to see areas of the customer base that are still facing budgetary constraints. Therefore, we are continuing to take what we believe is a prudent and cautious approach to business planning and management. We have begun to see marked traction for some of our initial XT Amplify program offerings. For example, a 500-bed academic medical center in Massachusetts is a new customer for Omnicell and is converting its automated dispensing system footprint to XT amplified cabinets.
Randall A. Lipps: And we continue to see areas of the customer base that are still facing budgetary constraints.
Randall A. Lipps: Therefore, we are continuing to take what we believe is a prudent and cautious approach to our business planning and management.
Randall A. Lipps: We have begun to see market traction for some of our initial <unk> amplify program offerings.
Randall A. Lipps: 500, plus bed academic medical center in Massachusetts, as a new customer for Omnicell and is converting is automated dispensing system footprint to etsy amplified cabinets.
Randall A. Lipps: Our Care Plus solution, which is designed to improve solution adoption and provide data-driven performance optimization information supported by expert services, was identified by the customer as a pivotal differentiator that created unique value for their purchase decision.
Randall A. Lipps: Our our care plus solution, which is designed to improve solution adoption and provide data driven performance optimization information supported by expert services was identified by the customer as a pivotal differentiator that created unique value for their purchase decision.
Randall A. Lipps: And as part of a six-year extension of a sole source agreement, a Kansas-based health system is seeking to maximize the value of their XT technology through XT Extend, a comprehensive console swap designed to improve a high level of security while enhancing the user experience. Health systems across the country continue to recognize the value of Omnicell's advanced services offering that is designed to help transform pharmacy care. In addition to adopting our central pharmacy dispensing services, a large Southern California hospital plans to leverage our IV compounding service in an effort to provide more accurate, safe, and cost-effective sterile compounding.
Randall A. Lipps: And as part of a six year extension of a sole source agreement.
Randall A. Lipps: Has this based health system seeking to maximize the value of their X T technology through XP extend a comprehensive console swab designed to improve a high level of security, while enhancing the user experience.
Randall A. Lipps: Health systems across the country continue to recognize the value of omni sales advanced services offerings that are designed to help transform pharmacy care.
Randall A. Lipps: In addition to adopting our central pharmacy dispensing services, a large southern California Hospital plans to leverage our IV <unk> service in an effort to provide more accurate safe.
Randall A. Lipps: Cost effective sterile compounding.
Randall A. Lipps: Our customer base for specialty pharmacy services now exceeds 400 hospitals and clinics. We're excited to announce the opening of a new location at Good Samaritan Hospital in Indiana, which cited Omnicell's experience and expertise in specialty pharmacy program management as key to their decision to partner with us. We expect our customer base to include an additional seven pharmacies to open in the second quarter of 2024. We believe the combination of Omnicell's 340B TPA with our specialty pharmacy services program management offering is delivering growth opportunities for our customers.
Randall A. Lipps: Our customer base for specialty pharmacy services, now exceeds 400 hospitals and clinics.
Randall A. Lipps: We're excited to announce the opening of a new location at good Samaritan Hospital in Indiana.
Randall A. Lipps: Which cited omni sales experience and expertise in specialty pharmacy program management as key to their decision to partner with us.
Randall A. Lipps: We expect our customer base to include an additional seven pharmacies to open in second quarter 2024.
Randall A. Lipps: We believe the combination of omni sales $3 40, B Tpa with our specialty pharmacy services program management offering is delivering growth opportunities for our customers.
Randall A. Lipps: Our enlivened health brand had a strong first quarter 2024, with a large buying cooperative choosing Enliven's analytics solution as it works to transform its complex pharmacy data into actionable insights and outcomes focused on patient care and operational efficiency. We had multiple other wins in the quarter as well. On April 16th, we announced XT Amplify. Innovative Program Intended to Enhance Pharmacy and Nursing Efficiency, reduce medication errors and waste, and ultimately maximize the value of the XT automated dispensing system investment
Randall A. Lipps: Our 11 health brand had a strong first quarter 2024 with.
Randall A. Lipps: With a large buying cooperative choosing enlivens analytic solution as it works to transform its complex pharmacy data into actionable insights and outcomes focused on patient care and operational efficiency.
Randall A. Lipps: We had multiple other wins in the quarter as well.
Randall A. Lipps: On April 16th we announced XT amplify.
Randall A. Lipps: Innovative program intended to enhance pharmacy and nursing efficiency.
Randall A. Lipps: Reduce medication errors and waste and ultimately maximize the value of the XT automated dispensing system investment.
Randall A. Lipps: We introduced the first set of solutions in this multi-year program as part of our virtual Illuminate 2024 customer event, where health care and pharmacy leaders had the opportunity to learn about the potential benefits of XT-AMPLIFI. We were joined by Jennifer Hillman, Executive Director of Pharmacy at San Antonio-based University Health, who recently completed an XT conversion project and shared her successful experience with attendees. While it's early, we assure you that XT Amplify is intended to be just the beginning of our reinvigorated focus on new products and services, which we expect to bode well for long-term growth.
Randall A. Lipps: We introduced the first set of solutions in this multiyear program as part of our virtual illuminate 2024 customer event.
Randall A. Lipps: Where health care and pharmacy leaders have the opportunity to learn about the potential benefits of XT amplify.
Randall A. Lipps: We were joined by Jennifer Hillman Executive director of Pharmacy at San Antonio based University Health.
Jennifer Hillman: Who recently completed the next T conversion project and share her successful experience with attendees.
Jennifer Hillman: While it's early we assure you that X T. Amplify is intended to be just the beginning of our reinvigorated focus on new products and services, which we expect to bode well for long term growth.
Randall A. Lipps: I hope that you can see that we are taking the necessary steps that we believe will strengthen our financial and operational performance, accelerate profitable growth, and drive shareholder value. We remain confident in Omnicell's long-term opportunities and continue to believe the company is uniquely positioned to transform the pharmacy care delivery model and ultimately help enable our customers to drive better outcomes and increase their returns on investment. Now, with that, I'd like to hand it over to Nchacha to discuss our results. Okay, Nchacha?
Jennifer Hillman: I hope that you can see that we are taking the necessary steps that we believe will strengthen our financial and operational performance accelerate profitable growth and drive shareholder value.
Jennifer Hillman: We remain confident in omni sales long term opportunities and continue to believe the company is uniquely positioned to transform the pharmacy care delivery model and ultimately help enable our customers drive better outcomes and increase their returns on investment.
Jennifer Hillman: Now with that I'd like to hand, it over to Charlie to discuss our results such as.
Charlie: Thank you Rhonda.
Nchacha Etta: I want to thank all of our employees for delivering the results this quarter. We exceeded our guidance across all key metrics, delivered strong cash flow, and managed our expenses carefully and responsibly, while we still have work to do to strengthen our financial and operational performance. We are off to a good start, and I am pleased with the level of commitment and engagement I see across our company.
Charlie: I wanted to thank all of our employees for delivering the results this quarter.
Charlie: We exceeded our guidance across all key metrics delivered strong cash flow and managed our expenses carefully and responsibly.
Charlie: While we still have work to do to strengthen our financial and operational performance.
Speaker Change: So a good start and I am pleased with the level of commitment and engagement across our company.
Nchacha Etta: Turning to our financial results, our first quarter 2024 total GAAP revenues were $246 million, a decrease of $13 million over the prior quarter and a decrease of $45 million compared to the first quarter of 2023. The year-over-year decrease reflects the impact of a continued challenging environment for some of our health system customers and the timing of our XT product lifecycle.
Charlie: Turning to our financial results.
Charlie: Our first quarter, pointing 24, total GAAP revenues with 246 million.
Charlie: A decrease of $13 million over the prior quarter and a decrease of 45 million compared to third quarter of 2023.
Charlie: The year over year decrease reflects the impact of a continued challenging environment for pharma.
Charlie: I felt the same customers on the timing of our product lifecycle.
Nchacha Etta: Services revenue was $113 million, an increase of 8% over the first quarter of 2023, which was primarily driven by growth in technical services, as we continue to see the benefits of the growing installed base and pricing actions. Total revenues in the first quarter were $4 million above the top end of our previously disclosed first quarter 2024 guidance range, which was primarily due to solid execution and timing within both technical services and our advanced services.
Charlie: Services revenue were $115 million, an increase of eight or by the first quarter of 2023 week was primarily driven by growth in cloud services as we continue to see the benefit from the growing installed base on pricing actions.
Charlie: Total revenues in the first quarter with $4 million above the top end of our previously disclosed first quarter 2024 guidance range, which was primarily due to solid execution on timing within both technical services.
Charlie: Advanced services.
Nchacha Etta: Non-GAAP gross margin for the first quarter of 2024 was 39.8%, a decrease of 380 basis points compared to the prior quarter, primarily due to lower revenue volume leverage. We expect our non-GAAP gross margin to expand in the second half of 2024 as we anticipate volume leverage from higher product revenue. A full reconciliation of our GAAP to non-GAAP results is included in each of our first quarter 2024 and fourth quarter 2023 Earnings Press releases, which are posted on our Investor Relations website.
Charlie: non-GAAP gross margin for the first quarter 'twenty 'twenty four was 59, 8%.
Charlie: A decrease of 380 basis points compared to the prior quarter.
Charlie: Primarily due to lower revenue volume leverage.
Charlie: Our non-GAAP gross margin to expand in the second half of 2024.
Charlie: We anticipate volume leverage from higher product revenue.
Charlie: A full reconciliation of GAAP.
Charlie: GAAP to non-GAAP results is included in each of our first quarter 2024 on fourth quarter 2020 earnings credits when leases.
Charlie: Are posted on our Investor Relations website.
Nchacha Etta: Our first quarter 2024 earnings per share, in accordance with GAAP, was a loss of $0.34 per share, compared to a loss of $0.32 per share in the prior quarter and a loss of $0.33 per share in the first quarter of 2023. Our first quarter 2024 GAAP Earnings Best Share includes the impact of $3 million for the potential wind-down of the Medimax Robotic Dispensing System product line we announced today, subject to local law and statutory Works Council consultation requirements.
Charlie: Our first quarter 2024 earnings per share in accordance with GAAP was a loss of 34 cents per share compared to a loss of <unk> 10 per share.
Charlie: In the prior quarter and a loss of 33 cents per share in the first quarter of 2023.
Charlie: Our first quarter 2024, GAAP earnings per share includes the impact of $3 million for the fourth.
Charlie: Dennis will wind down of the <unk> robotic dispensing systems product line, we announced today subject to local law statutory work council consultations requirements.
Nchacha Etta: If the wind-down proceedes, the total non-recurring costs we estimate to incur related to the wind-down are approximately $15 to $20 million, of which we have already incurred approximately $5 million. If the wind-down is agreed to, the RDS restructuring plan is expected to increase our analyzed net operating profits, and we plan to incorporate this expectation in our full year 2025 guidance. We do not expect the RDS restructuring plan to have a significant impact on our revenue, and we do not expect to achieve significant cost or operating expense savings related to the restructuring in 2024.
Charlie: Is the wind down proceeds.
Charlie: Total non recurring costs, we estimate to incur related to the wind down approximately $15 million to $20 million.
Charlie: We have already incurred approximately $5 million.
Charlie: If the wind down is agreed to the restructuring plan is expected to increase our annualized net operating profit and we plan to incorporate these expectation.
Charlie: Full year 2025 guidance.
Charlie: We do not expect the Audi as restructuring plans will have a significant impact on our revenue and we do not expect to achieve significant cost operating expense savings related to the restructuring in 2024.
Nchacha Etta: Our first quarter 2024 non-GAAP earnings per share were $0.03 compared to $0.33 per share in the prior quarter and $0.39 per share in the same period last year. First quarter non-GAAP EBITDA was $11 million, a decrease of $13 million compared to the previous quarter and a decrease of $16 million when compared to the same period last year. First quarter 2024 non-GAAP EBITDA and non-GAAP earning space share exceeded our expectations, primarily due to revenue execution and timing, as well as strong cost and operating expense management, as we continue to take what we believe is a prudent approach with our investment decision. The benefits from our higher revenue and lower expenses were partially offset by higher than expected income tax expense.
Charlie: Our first quarter 2024, non-GAAP earnings per share were 3% compared to 33 cents per share in the prior quarter and 39 cents per se.
Charlie: Three of last year.
Charlie: Third quarter, non-GAAP EBITDA was $11 million.
Charlie: We thought 15 million compared to the previous quarter and a decrease of $16 million when compared to the same period last year.
Charlie: Third quarter, 2024, and non-GAAP EBITDA and non-GAAP earnings per share exceeded our expectations, primarily due to revenue execution and planning as well as strong cost on operating expense management as we continue to take what we believe is a prudent approach with our investment decisions.
Charlie: The benefit from our higher revenue and lower expenses were partially offset by higher than expected income tax expense.
Nchacha Etta: The higher first quarter income tax expense was a result of timing within the year, and we continue to expect our 2024 non-GAAP effective blended tax rate to be approximately 19 percent. At the end of the first quarter of 2024, our cash and cash equivalent balance was $512 million, up from $468 million as of December 31, 2023. Non-GAAP-free cash flow during the first quarter of 2024 was $38 million as we continue to see strong cash collections and working capital management.
Charlie: Higher first quarter income tax expense.
Charlie: The result of timing within the year and we continue to expect our 2024 non-GAAP effective blended tax rate to be approximately 19%.
Charlie: At the end of the first quarter of 2024, our cash and cash equivalents balance was $512 million up from 468 million as of December 31, 2023.
Charlie: non-GAAP free cash flow during the first quarter of 2024 was $58 million as we continue to see strong cash collections on working capital management.
Nchacha Etta: In terms of accounts receivable, day sales outstanding for the first quarter of 2024 was 94 days, an increase of four days over the prior quarter, primarily due to a modest decrease in revenues. Inventories as of March 31, 2024 were $103 million, a decrease of $7 million from the prior quarter and a decrease of $38 million from March 31, 2023. The decrease is primarily due to the strong efforts of our supply chain team as they continue to execute on and make progress on our Global Supply Chain Process Improvements and Inventory Management Initiative.
Charlie: In terms of accounts receivable days sales outstanding for the first quarter of 2024 was 94 days an increase of four days over the prior quarter, primarily due to the modest decrease in revenues.
Charlie: Inventory at March 30 <unk>.
Charlie: 2024 were 103 million a decrease of $7 million from the prior quarter.
Charlie: We sold $58 million from March 31, 2023.
Charlie: The decrease is primarily due to the strong efforts of our supply chain team as they continue to execute and make progress on our global supply chain process improvements in inventory management initiatives.
Nchacha Etta: For the second quarter of 2024, we are providing the following guidance. We expect total second quarter 2024 revenues to be between $250 million and $260 million, with product revenues to be between $140 million and $145 million, and service revenues to be between $110 million and $115 million. We expect second quarter 2024 non-GAAP EBITDA to be between $14 million and $20 million, and we expect second quarter 2024 non-GAAP earnings per share to be between $0.10 per share and $0.20 per share.
Charlie: For the second quarter of 2024, we are providing the following guidance.
Charlie: We expect total second quarter 2020 for revenues to be between $250 million and 260 million with product revenues to be between $140 million and $145 million and service revenue to be between $110 million on <unk>.
Charlie: $115 million.
Charlie: We expect second quarter, 2024, non-GAAP EBITDA to be between $14 million and $20 million.
Charlie: And we expect second quarter 2024, non-GAAP earnings per share to be between 10 cents per share and <unk> per share.
Nchacha Etta: In summary, we are working with a sense of urgency to strengthen our operational and financial performance. We are pleased to have delivered the first of many expected innovations and new capabilities for our fleet of XT medication dispensing systems. And we believe Omnicell is well positioned for the future. With that, we would like to open the call to questions.
Charlie: In summary, we are working with a sense of urgency.
Charlie: To strengthen our operational and financial performance. We are pleased to have delivered the first of many expect that innovation and new capabilities for our fleet of <unk> medication dispensing systems.
Charlie: We believe omnicell is well positioned for the future.
Speaker Change: With that we would like to open the call for questions.
Operator: At this time, if you would like to ask a question, please press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, simply press star 1 again.
Speaker Change: At this time, if you would like to ask a question. Please press star followed by the number one on your telephone keypad. If you would like to withdraw your question simply press Star One again as a reminder, please limit yourself to one question only if you have any additional questions.
Operator: As a reminder, please limit yourself to one question only. If you have any additional questions, please return to the queue. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Stan Berenshteyn from Wells Fargo. Please go ahead.
Speaker Change: Please return to the queue, we will pause for just a moment to compile the Q&A roster.
Speaker Change: Your first question comes from the line of Stan Bernstein from Wells Fargo. Please go ahead.
Stanislav Berenshteyn: Hi, good morning everybody. Just maybe a question on the XT Extend mid-cycle upgrade. Can you just walk us through how we should think about this? How much of the installed base is expected to be upgraded? What's the time frame expectation there? And then how many years of life does this upgrade expect to add to the cabinets? Thanks.
Stan Bernstein: Hi, good morning, everybody.
Stan Bernstein: Maybe a question on the XD extended mid cycle upgrade can you just walk us through how we should think about this how much of the installed base is expected to be upgraded what's the timeframe expectation there and then how many years of life does this upgrade expect to add to the covenants.
Randall A. Lipps: Thanks, Stan. Well, we're really excited about the XT Amplify, and it's really more than just a console upgrade. There are a multitude of products and services we just announced that go with the Amplify platform. And, as we stated before, we will continue this multi-year journey of expanding the XT Amplify to include more products and services that allow us to get into areas that we don't service today, like ambulatory and surgery centers and other areas of the inpatient that don't have good visibility.
Speaker Change: Thanks, Dan well, we're really excited about DXP amplifying its really more than just the console upgrade.
Speaker Change: There are a multitude of products and services, we just announced they go with the amplify platform.
Speaker Change: And as we stated before we will continue this multi year journey of expanding.
Speaker Change: The X T. Amplify to include more products and services that allow us to get into areas that we don't service today like ambulatory.
Speaker Change: Surgery centers.
Speaker Change: And other areas the Ann patients that don't have good visibility. So it is a multiyear program with multi products and services that go beyond just a console upgrade so.
Randall A. Lipps: So it is a multi-year program with multiple products and services that go beyond just a console upgrade. So I think we want to be really careful to get our customers expecting this innovation to actually solve some problems that we haven't been able to solve.
Speaker Change: I think where we want to be really careful too.
Speaker Change: Get our customers are expecting just innovation to actually solve some problems that we haven't been able to solve.
Speaker Change: Yeah.
Randall A. Lipps: Okay, can you maybe give us a quick update on the regulatory review of the IVX robots? Are you seeing any resolution on that one?
Speaker Change: Okay can you maybe give us a quick update on the regulatory review of the IV extra robots are you seeing on your rail solution on that front.
Randall A. Lipps: Definitely have. At the end of last year, there was some final resolution on some of the regulations going forward, so we've now taken that information and merged it into our customer interaction, and we have a more clear determination on how to classify each of the robot locations and what set of regulations they're under as they deploy.
Speaker Change: Well definitely have at the end of last year there were some.
Speaker Change: A final resolution on some of the regulations going forward. So we've now taken that information and melded into our customer interaction and I have a more clear determination.
Speaker Change: <unk> five each of the robot locations and what set of regulations that are under as they deploy.
Randall A. Lipps: Thank you. And maybe just to backtrack to the first question, for clients that are just doing the console upgrade, once they do the upgrade, can you just share with us how many more years of life the cabinet gets once they do that? Well, it's a...
Speaker Change: Thank you and maybe just to back for the quarter.
Speaker Change: First question.
Speaker Change: For clients that are just doing the console upgrade so once they do the upgrade can you just share with us how.
Speaker Change: Many more years of wife goes to the cabinet got thinking about upgrade.
Speaker Change: Okay.
Randall A. Lipps: Well, it's probably customer-dependent, but... I think that the key is in order to get the next versions of software and hardware, you eventually have to do the upgrade, or to get access to new product lines, you have to do the upgrade. And I think the future of Amplify includes both hardware and software changes, but it isn't really about overly focusing on those pieces, but the solutions we're delivering to the market.
Speaker Change: Well, it's a it's probably customer dependent but.
Speaker Change: I think the key is in order to get the next versions of the software and hardware you eventually have to do the upgrade or to get access to the new product lines you have to do the upgrade.
Speaker Change: And I think the future of amplify includes both hardware and software changes, but it isn't really about overly focusing on those piece, but the solutions, we're delivering to the market.
Speaker Change: Great. Thanks, so much.
Speaker Change: Thanks, Dan.
Operator: The next question comes from the line of Matt Hewitt from Kriegshalm. Please go ahead.
Speaker Change: The next question comes from the line of Matt Hewitt from Craig Hallum East go ahead.
Matthew Gregory Hewitt: Good morning. Thank you for taking the questions. First up, regarding the health of the customers, Randy, it was nice to hear that you're starting to see some improvement there. Are you seeing a change in the discussions? Obviously, last year was really tough, but are you hearing from your customers that, okay, they feel better about their financial position, they feel better about their staffing positions, and now they're ready to come back to the table and, you know, proceed with the plans that they had maybe thought about last year, but now they're ready? Or is it still kind of touch and go, and you have the conversation, and they're still kind of, I don't want to say standoffish, but holding back a little bit?
Matthew Gregory Hewitt: Good morning, Thank you for taking the questions.
Matthew Gregory Hewitt: First off regarding the health of the customer.
Matthew Gregory Hewitt: Randy It was nice to hear that you're starting to see some improvement there.
Matthew Gregory Hewitt: Are you seeing a change in the discussions obviously last year was really tough but are you hearing from your customers that okay. We're feeling better with our financial position, we're feeling better about our staffing positions now we're ready to come back to the table and proceed with the plans that we had maybe thought about last year, but now we are ready.
Matthew Gregory Hewitt: Or is it still kind of touch and go in and you have the conversation and they're still kind of I don't want to say stand offish, but they're holding back a little bit.
Randall A. Lipps: Well, I think it, you know, it really depends on the account. There are some accounts that just seem to be doing well, but there are many that are not. And there seems to be a lot of sensitivity around capital equipment deployment at these institutions, particularly around inpatient. So, I think we're having good discussions. People want these products, so it's really about the timing of the return of the health of the capital equipment environment in these accounts. And I would just say they're pretty prudent and cautious about it. But for the long term, I think we're in a good position.
Randy: Well I think it's you know it's really depends on the account there are some accounts that just seem to be doing well, but there are many that are not and there seems to be a lot of sensitivity around capital equipment deployment at these.
Randall A. Lipps: Institutional particularly around inpatient.
Randall A. Lipps: So I think we're having good discussions people want these products, it's really about the timing of returning of the health of the capital equipment environment in these accounts.
Randall A. Lipps: Accounts and and I would just say.
Randall A. Lipps: They are pretty prudent and cautious about it but.
Randall Lipps: For the long term I think we're in a good position.
Matthew Gregory Hewitt: Got it. And then maybe a separate question regarding XT Amplify. How should we be thinking about, I guess, the adoption curve of the full XT Amplify platform? Does that change the traditional kind of model, if you will, the bell-shaped curve? Or I guess another way to look at it is, with these incremental capabilities and services, how does that change the revenues from XT as we look out over the next few years? Because it seems to me, at least, that there's more of a services component to that. Does it change the REVREC as we look out over the lifetime of Amplify?
Speaker Change: Got it and then maybe a separate question regarding ex the amplify.
Matthew Gregory Hewitt: How should we be thinking about I guess, the the adoption curve of the full X T amplified platform.
Matthew Gregory Hewitt: Does that change the the traditional kind of model. If you will the bell shaped curve or I guess another way to look at it is with these incremental capabilities with the services how does that change the.
Matthew Gregory Hewitt: <unk> revenues.
Matthew Gregory Hewitt: From X T. As we look out over the next few years because it seems to me at least that there is more of a services component to that so.
Matthew Gregory Hewitt: Does it change the Rev Rec as we look out over the lifetime of amplify.
Randall A. Lipps: Well, there are still connected devices are generally still mostly capital. We do have some connected devices that are not.
Speaker Change: Well there is still a good the connected devices are generally still mostly capital.
Randall A. Lipps: We do have some connected devices that or not.
Randall A. Lipps: But yeah, I think what's going to drive our customers to move to the Amplify platform, which we just launched, and it does take a while to get into the pipeline and get decisions moving, it won't be just to upgrade the console. It'll be these other areas that they want to access these new innovations. And we did say that we were going to have not only a multi-year roadmap of Amplify innovations, but even this year, we're planning to announce more innovations by the end of the year.
Randall A. Lipps: But yeah, I think what's going to drive our customers to move to the amplify platform, which we just launched and it does take.
Randall A. Lipps: While to get into the pipeline and good decision moving it won't be just to upgrade the council it'll be these other areas.
Randall A. Lipps: Areas that they want to access these new innovations and we did say that we were going to have not only a multiyear roadmap of amplify innovations, but even this year, we're planning to announce more innovations by the end of the year.
Matthew Gregory Hewitt: Got it. All right. Thank you.
Speaker Change: Got it alright, thank you.
Matthew Gregory Hewitt: Yeah.
Matthew Gregory Hewitt: Yeah.
Operator: The next question comes from the line of Scott Schoenhaus from Keypad. Please go ahead.
Matthew Gregory Hewitt: The next question comes from the line of Scott Schonhaus from Keybanc. Please go ahead.
Scott Anthony Schoenhaus: Hey, team. Good morning.
Scott Anthony Schoenhaus: Hey, good morning, Thanks for taking my question.
Scott Anthony Schoenhaus: I guess first on the end markets did you see any change in your behavior from your customer base. During the change healthcare disruption and then now post into April and May have you seen any impact.
Scott Anthony Schoenhaus: Either operationally from a labor perspective, they had a focus on getting.
Scott Anthony Schoenhaus: The billings and claim filed did you see any impact from your customers on your business or forward demand. Thanks.
Scott Anthony Schoenhaus: Thanks for taking my question. I guess first on the end markets, did you see any change in your behavior from your customer base during the change healthcare disruption and then now post-April and May? Have you seen any impact operationally, from a labor perspective, as they had to focus on getting the billings and claims filed? Did you see any impact from your customers on your business or forward demand? Thanks.
Scott Anthony Schoenhaus: We have not seen any impact on our business, but to be sure we're cautious cautiously monitoring it.
Randall A. Lipps: We have not seen any impact on our business, but to be sure, we're cautiously monitoring it and looking for any impact. But to this point, we haven't seen any disruption in our business.
Scott Anthony Schoenhaus: And looking for any impact but to this point, we haven't seen any disruption in our business.
Scott Anthony Schoenhaus: Okay. Thanks, Randy. And then on the XT Amplify side, I think you noted last quarter that some of the bookings guidance for this year included this upsell. Given the traction that you've clearly seen so far, does this change the amount of bookings baked into your full-year guidance for XT Amplify? Thanks.
Speaker Change: Okay. Thanks, Randy and then on the X. The amplify side I think you noted last quarter that some of the bookings guidance for this year included.
Scott Anthony Schoenhaus: Upsell given the traction that you've clearly seen so far does this change the amount of bookings.
Scott Anthony Schoenhaus: Baked into your full year guidance for the XT amplify thanks.
Randall A. Lipps: I think we're comfortable with our position and with our outlook and on our guidance for product, which I believe was slightly higher this year than it was last year, and that did contemplate the launch of Amplify.
Speaker Change: I think we're comfortable with our <unk>.
Randall A. Lipps: And then on our outlook and our guidance on product, which I believe was slightly higher this year than it was last year.
Randall A. Lipps: And that did contemplate the launch of Apple products.
Nchacha Etta: And then, if I could just sneak one last one. Sorry, Randy. The RDS divestiture, does this signal to us that you're going to be divesting from international markets going forward? How should we read into the RDS divestiture? Yeah, this is Nchacha. I don't think these signals are weird.
Randall A. Lipps: And then if I could just sneak one last one sorry, Randy the Rds.
Nchacha Etta: Divestiture does this signal to us that you are going to be divesting from international market.
Nchacha Etta: Going forward, how should we read into.
Nchacha Etta: The Rds divestiture.
Nchacha Etta: Yeah, this is Nchacha. But I don't think this signals that we are exiting the international market. This action that we've taken or that we're considering taking is part of an ongoing plan to ensure that our investments generate the right level of returns for our shareholders. And so, as you know, we did engage with an outside consultant. So, this is part of the overall strategy to continue to improve our overall financial performance and ensure that we are unlocking sustainable or long-term value for our shareholders.
Nchacha Etta: Yeah, I Gotcha I don't think these signals that we're exiting the international market.
Nchacha Etta: This action that we've taken or that we're considering taking is part of an ongoing plan to ensure that we are.
Nchacha Etta: That our investment is generally the right level of returns for our shareholders and so as you know we did engage with an outside consultant. So this is part of the overall strategy to continue to improve our overall financial performance and then show that we are unlocking sustainable long term value for our shareholders.
Speaker Change: Thank you.
Speaker Change: Thanks Scott.
Nchacha Etta: Yeah.
Operator: The next question comes from the line of Jessica Tassan from Piper Sandler. Please go ahead.
Speaker Change: The next question comes from the line of Jessica <unk> from Piper Sandler. Please go ahead.
Jessica Elizabeth Tassan: Hi guys, thanks for the question. Maybe to kick off, I was hoping you could just help us understand what some of the offerings in the XT Amplify Suite are. So ServerScale, Care+, XT Extend, what are these solutions, and are all of them available today?
Jessica Elizabeth Tassan: Hi, guys. Thanks for the question. So maybe I'll kick off I was hoping you could just help us understand what some of the offerings.
Randall A. Lipps: Yeah, all of them are available for order today. The extent of what is up, you know, is the centerpiece of the hardware is the console upgrade. The Care Plus allows us to go in and redesign the workflows for our customers. Server scale allows us to not have to wait on the timing of hospital budgets to get new servers to be expanded to meet greater demands for the number of connected devices on their server, so it allows hospitals to be able to pay for it as a service so that the server pieces are included whenever they need them. And I just think MedChill is one of the very exciting pieces.
Speaker Change: Paul amplify.
Randall A. Lipps: Our server scale Careplus.
Speaker Change: What are these the Lucerne and then are all of them available today.
Randall A. Lipps: Yeah all of them are available for order today. The extent is absolutely you know as the centerpiece on the hardware console upgrade.
Randall A. Lipps: The care plus allows us to go in and.
Randall A. Lipps: <unk> redesigned the workflows for our customers service scale allows us to.
Randall A. Lipps: Not have to wait on the timing of hospital budgets to get new servers to be expanded too.
Randall A. Lipps: Meet group.
Randall A. Lipps: Peter demands for the number of connected devices on their servers sorta allows.
Randall A. Lipps: For to be able to pay it as a service so that the server pieces are included whenever they need it.
Randall A. Lipps: And I just think med shell is one of the very exciting pieces, we get a lot of feedback that customers wanted to go to this kind of product, which really helps you.
Randall A. Lipps: We get a lot of feedback that customers want to go to this kind of product, which really helps you sanitize down to the single skew on a refrigerated product and have access to and locking control of it. So this gives you more confidence from a pharmacy standpoint of deploying refrigerated products, which can be costly or toxic, and have better control out of them instead of just an open refrigerator. So we know there's good demand for these products and that we're already starting to see people highly engaged with them and wanting to get access to them. But I'm not quite sure.
Randall A. Lipps: Singular down to the single SKU on a refrigerated product and have access to lock in control to it. So this gives you more confidence from a pharmacy standpoint of deploying.
Randall A. Lipps: Refrigerated products, which can be cost costly or toxic.
Randall A. Lipps: I have better control out of Berlin said with just an open refrigerator.
Randall A. Lipps: So we know there's good demand for these products and that we're already starting to see people highly engaged about them and want them to get access to them.
Randall A. Lipps: Not quite sure.
Randall A. Lipps: All of them will be all of them are bookable now all of them will be delivered this year.
Randall A. Lipps: Yeah.
Randall A. Lipps: And I mean, just to know, kind of.
Randall A. Lipps: They're not perfect.
Randall A. Lipps: Kind of how you are on your specialty final pool for our golf ball business has helped.
Randall A. Lipps: All formula product development pipeline if at all.
Randall A. Lipps: Yeah, I think the nice thing... Aspect of specialty pharmacy is that it really engages with a very high level of the C-suite and on a monthly basis, which then really allows us the platform to talk about other ways to improve both revenues and cost impacts of the pharmacy operation. And as we look at what our health systems are going through or what they need, it's a lot of solutions that are dependent on ambulatory or outpatient clinics. And so, we're excited that Amplify, on its roadmap, has solutions that address those places.
Speaker Change: Yeah, I think the nice.
Randall A. Lipps: Aspect of specialty pharmacy is that really engages with a very high level of the C suite and really on a monthly basis, which then really allows us the platform to talk about other ways to improve both revenues and cost impacts of the pharmacy.
Randall A. Lipps: <unk>.
Randall A. Lipps: And as we look at.
Randall A. Lipps: You know, what our health systems are going through or what what what they need.
Randall A. Lipps: It's a lot of solutions that are dependent on ambulatory or outpatient clinics and so we're excited that amplify in his roadmap has solutions that address those places.
Randall A. Lipps: Yes.
Randall A. Lipps: And my last question is just can you update us on trends in 340B, so both on the contract pharmacy side and on the covered entity side, maybe like year over year, quarter over quarter, just volumes would be helpful.
Randall A. Lipps: Awesome.
Randall A. Lipps: Last question is just can you update us on trends and <unk>, they're both on the contact pharmacy side and on the covered entity type model like.
Randall A. Lipps: Like year over year quarter over quarter.
Speaker Change: That would be helpful.
Randall A. Lipps: Well, I think 340B is pretty much third-party administered, TPA, is sort of in line with where we were last year and it continues to be. It is also a good product to combine with our specialty pharmacy services so that when a drug is available on the outpatient or through the third-party administrative side, it's an extra benefit that we can offer instead of having to run it through the third-party administration. Thank you. Specialty Pharmacy, On-Site Pharmacy. So we think it's a good product to have and to offer in combination with their specialty pharmacy service.
Randall A. Lipps: Well I think three or four it would be it's pretty much a third party administrator Tpa is sort of in line with where we were last year and it continues to be it is also a good product to combine with our specialty pharmacy services, so that way.
Randall A. Lipps: When a drug is available on the outpatient or through the third party administrators side, it's an extra benefit that we can offer this without having to run it through.
Randall A. Lipps: The.
Randall A. Lipps: Specialty pharmacy.
Randall A. Lipps: On site pharmacy so.
Randall A. Lipps: We think it's a good.
Randall A. Lipps: Product and to offer in combination with their specialty pharmacy service.
Jessica Elizabeth Tassan: Jess, I'll just add to that. I remember the last time we spoke, I think we said it, Pre-4DB is generating about $30 to $35 million annually for us, and we expect that to continue.
Speaker Change: Yes, I'll just add to that that I remember the last time, we spoke I think we said it three or four the base generating about $30 million to $35 million and while LIBOR was and we expect that to continue.
Jessica Elizabeth Tassan: Got it. So no growth year over year in 24 is that on the 340B contract pharmacy split billing side. That's correct. We do expect it to be flat, but we continue to...
Jess: Got it so no growth year over year and planning for that.
Jessica Elizabeth Tassan: On the Green Party B contract pharmacy.
Jessica Elizabeth Tassan: Hi.
Jessica Elizabeth Tassan: That's correct. We do expect it to be flat, but we continue to...it's part of our overall strategy, as Randall mentioned, and we look forward to combining it with our inventory optimization services.
Jessica Elizabeth Tassan: That's correct, we do expect it to be flat, but we continued to it as part of our overall strategy as Randall mentioned then.
Jessica Elizabeth Tassan: We look forward to combining it with our inventory optimization services.
Speaker Change: Got it thank you guys.
Speaker Change: Thanks Jess.
Operator: Again, if you would like to ask a question, please press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, simply press star 1 again.
Speaker Change: Again, if you would like to ask a question. Please press star followed by the number one on your telephone keypad. If you would like to withdraw your question simply press Star one again and as a gentle reminder to everyone. Please limit yourselves to one question. If you have any additional questions.
Operator: And as a gentle reminder to everyone, please limit yourselves to one question only. If you have any additional questions or follow-ups, please return to the queue. The next question comes from the line of David Larsen from VTIG. Please go ahead.
David Michael Larsen: Follow ups, please return to the queue.
Operator: The next question comes from the line of David Larsen from <unk>. Please go ahead.
Jenny Shen: Hi, this is Jenny Shen, on behalf of David Larsen. Thanks for taking my questions and congratulations on the quarter.
Operator: Hi.
David Michael Larsen: Listen on Frank over in Barcelona.
Jenny Shen: And congrats on the corner I think you mentioned.
Randall A. Lipps: I think you've mentioned some focus on outcomes-based solutions and taking an outcomes-centric approach. Can you just elaborate on what that means, what your focus is on there, and highlight some of those key outcomes? Does that potentially mean that you could move to a model where, say, your clients recognize a certain amount of cost savings or reach a certain level of adherence where you would receive a certain performance payment for that? Yeah.
Randall A. Lipps: <unk> focus on outcome based solutions and taking on outcomes centric approach can you just elaborate on what that means what your focus is on there.
Randall A. Lipps: Some of those key outcomes does that.
Randall A. Lipps: <unk> mean that you could move to a model where.
Randall A. Lipps: Our clients recognize a certain amount of cost savings or <unk>.
Randall A. Lipps: A certain level of adherence where you would receive a certain performance payment for that.
Randall A. Lipps: Yeah, I think that's a little bit beyond where we're thinking at the moment, but certainly medication management is such a big factor in the outcome of any patient, as well as the finances of any event related to a patient activity. So I think it's prudent for us to make those connections between those pharmacy activities and the impact on the patient, as well as to the bottom line of the facility. So they're easier to make as you get access to more of the data and get more access and visibility to the transactions throughout a patient's episode, and we continue to see that.
Randall A. Lipps: Yeah, I think that's a little bit beyond where were thinking at the moment, but certainly medication management is such a big data and the outcome of any patient whether and as well as the finances of of any event.
Randall A. Lipps: Related to a patient activity. So I think it's prudent upon us to make those connections between those pharmacy activities and the impact eventually to the patient as well as to the bottom line of the facility. So they're easier to make as you get access to more of the data and get more access.
Randall A. Lipps: And visibility to the transactions throughout.
Randall A. Lipps: Patients episode, and we continue to see that we'd probably see it most in our retail.
Randall A. Lipps: We probably see it most in our retail cloud-based solution set, where we're able to inform the pharmacy and eventually doctors and patients how well they're adhering to their medication management regimens. So those are the kinds of outcomes we're looking at. We're not quite there yet tying it to the actual scientific outcome, so to speak.
Randall A. Lipps: Our cloud based solution set where we're.
Randall A. Lipps: We're able to inform through.
Randall A. Lipps: Our retail software, where we're able to inform the pharmacy and eventually.
Randall A. Lipps: Doctors and patients how well, they're adhering to their medication management regiments. So those are the kinds of outcomes. We're looking at we're not.
Speaker Change: Yeah, yes, tying it to the actual scientific.
Randall A. Lipps: Scientific outcomes so to speak.
Randall A. Lipps: Yeah.
Nchacha Etta: Anything else, Jenny? A quick question on cost. You've taken some good cost savings initiatives over the last few quarters. Any additional levers you think you can pull there?
Randall A. Lipps: Anything else journey.
Speaker Change: A quick question on cost.
Nchacha Etta: Hmm cost savings and just sort of over the last few quarters, just any additional levers do you think you can pull there.
Nchacha Etta: Yes, Jenny, we do continue to evaluate and assess our overall cost structure, and this is part of our ongoing strategy, and we will make the right decisions that we think necessary that will continue to help us increase our overall financial performance and unlock shareholder value.
Jenny Shen: Yes, Jimmy we do continue to evaluate and assess our overall cost structure and this is part of our.
Nchacha Etta: Ongoing strategy and we will make the right decisions.
Nchacha Etta: We think this is one that will continue to help us.
Nchacha Etta: Increase our overall financial performance and unlock shareholder value.
Jenny Shen: Thank you. Congratulations on the quarter.
Nchacha Etta: Thank you congrats on the client.
Jenny Shen: Thanks.
Operator: The next question comes from the line of Stephanie Davis from Barclays. Please go ahead.
Jenny Shen: The next question comes from the line of Stephanie Davis from Barclays. Please go ahead.
Anne Elizabeth Samuel: Hi, guys. This is Anna Krasensky speaking on behalf of Stephanie. Thank you for taking our questions. My first question is, I was curious if you could talk about how hospital buying is being impacted by the push-pull of change disruption and better utilization levels.
Stephanie July Davis: Hi, guys. This is integral lumpy.
Anne Elizabeth Samuel: Thank you for taking our questions.
Anne Elizabeth Samuel: I was curious if you could talk about how hospital behind it being impacted by the protocol change disruption.
Speaker Change: Thank you.
Randall A. Lipps: I think if you're referring to the change impact, we're not seeing any impact on our business, but we're monitoring it carefully.
Anne Elizabeth Samuel: I think if you're referring to the change.
Randall A. Lipps: Impact, we're not seeing any impact in our business, but we're monitoring it carefully.
Speaker Change: Okay. Okay. Thank you and then as a follow up given the recent <unk>.
Anne Elizabeth Samuel: Okay, thank you. And then, as a follow-up, just given the recent cadence of forward guidance conservatism, can you walk us through what your assumptions are in the TQ guidance? And is this reflective of a pull forward in one cue or the softer backdrop, or just setting a lower bar?
Anne Elizabeth Samuel: Our guidance conservatism can you walk us through what your assumptions are.
Anne Elizabeth Samuel: This reflected a pull forward in <unk> or the softer backdrop like a funnel a lower bar.
Anne Elizabeth Samuel: Sure.
Nchacha Etta: Yes, we're very comfortable with our plan for the guidance that we provided. I know we had a good first quarter, and we are not changing our outlook at this point. We continue to track to what we provided. We have seen some headwinds with some of our customers, but we're maintaining our guidelines for the year. That's helpful; thank you for the color.
Speaker Change: Yes, we're very comfortable with our plan for the guidance that we provided I know we had a good first quarter and we are not changing our outlook at this point we continue to.
Nchacha Etta: Track to what we provided are we are seeing some.
Nchacha Etta: Headwinds with some of our customers, but we are maintaining our guidance for the year.
Anne Elizabeth Samuel: Got it. That's helpful. Thank you for the color.
Speaker Change: Okay. That's helpful. Thank you for the color.
Speaker Change: Next question the next question.
Operator: The next question comes from the line of Bill Sutherland from Benchmark Company. Please go ahead.
Anne Elizabeth Samuel: The next question comes from the line of Bill Sutherland from Benchmark Company. Please go ahead.
William Sutherland: Thanks, everyone. Nchacha, the cost initiatives, you know, the cost takeouts that you plan, Nchacha, are they fully reflected now in the and the model that we're seeing for...
William Sutherland: Thanks, everyone, Hey, cha-cha.
Speaker Change: Hey kept the cost initiatives.
William Sutherland: The cost Takeouts that you planned such are they fully reflected now in the.
William Sutherland: And the model that we're seeing for <unk>.
Speaker Change: Yes <unk>.
Nchacha Etta: Bill, I want to make sure I understand your question. Are you referring to which cost takeout are you referring to?
William Sutherland: Bill.
William Sutherland: To make sure I understand your question, you referred which cost takeout or are you referring to.
William Sutherland: The ones that you've been, you implemented them year-end, correct? Am I remembering correctly? Yes. Okay. So there's been nothing incremental year-to-date?
Bill: The ones that.
William Sutherland: You've been you implemented yearend correct am I remembering correctly, yes.
William Sutherland: Okay.
William Sutherland: It's been nothing incrementals year to date.
Nchacha Etta: Well, the majority of the benefit from the cost actions was realized at the beginning of the first quarter of this year. With a smaller portion, we anticipate a smaller portion to continue throughout the year, but the majority was realized in the first quarter.
William Sutherland: Well the majority of the benefit from the cost actions.
Nchacha Etta: Well realize the beginning of the first quarter of this year.
Nchacha Etta: With a smaller portion we anticipate a smaller portion to continue throughout the year, but the majority was realized in the first quarter.
Nchacha Etta: Okay.
William Sutherland: and then over to Enliven. Can you add a little more color, Randy, potentially on?
Nchacha Etta: And then over to enliven.
Enliven: Can you a little more color Randy potentially on.
Randall A. Lipps: Now, what benefits the business and the outlook for it?
Enliven: What benefited the business and the outlook for it.
Randall A. Lipps: Yeah, I think we're cautiously optimistic there, but we've seen a good start to the year with some nice wins, and those wins are the contracting portion, and they will result in the ARR as we move forward. But it's nice to see that business, and I think that's coming because of the settling down of pharmacists and retail outlets a little bit. And so it gives us a good platform to come in and put in new innovation. But you know, that business is doing solid, and we believe it will eventually grow steadily.
Enliven: Yeah, I think we're cautiously optimistic there, but we've seen some a good start to the year was.
Randall A. Lipps: Nice wins and those wins are alright.
Randall A. Lipps: The contracted portion and they will result in the <unk> as we move forward, but.
Randall A. Lipps: It's nice to see that business.
Randall A. Lipps: And I think that's coming because of the settling down of pharmacists and retail outlets a little bit and so it gives us a good platform to come in and put in new innovation.
Randall A. Lipps: But that business.
Randall A. Lipps: <unk> is doing solid and that we believe will eventually grow steadily over the long term.
William Sutherland: Has it been more about new rooftops or adding services to current clients?
Randall A. Lipps: Has it been more about new rooftops or we're adding services to current clients.
Randall A. Lipps: I think the most, a little bit of both, but I think the most recent is Rooftop.
William Sutherland: I think the most a little bit of both but I think the most recent as rooftops.
Randall A. Lipps: Okay.
William Sutherland: Okay. Because it seems like you have such a massive market share. Okay. Thanks, everybody.
Randall A. Lipps: Okay, because it seems like you have such a massive market share.
William Sutherland: Okay. Thanks, everybody.
Speaker Change: You bet.
Operator: The next question comes from the line of Stan Berenshteyn from Wells Fargo. Please go ahead.
William Sutherland: The next question comes from the line of Stan Bernstein from Wells Fargo. Please go ahead.
Stanislav Berenshteyn: Hi, thanks for allowing me to follow up here. Just wanted to quickly ask your comments regarding the services revenue pull forward. Can you just give us some color as to what contributed to the timing impact in the quarter?
Stanislav Berenshteyn: Hi, Thanks for allowing me to a follow up here just wanted to quickly ask on your comments regarding the services revenue pull forward can you just give us some color as to what contributed to the timing impact in the quarter.
Nchacha Etta: Yes, Stan, we saw the timing impact was primarily driven by, you know. We do expect that to even out as we go throughout the course of the year, so that's why we're tracking or maintaining the guidance outlook that we provided.
Stanislav Berenshteyn: Yes, Stan we saw.
Stan: The timing impact was primarily driven by you know Paul.
Nchacha Etta: For the Miami.
Nchacha Etta: Advanced services as well as our technical services, we do expect that.
Speaker Change: Even though that as we go throughout the course of the year. So that's why we're.
Nchacha Etta:
Nchacha Etta: Trucking or maintaining the guidance outlook that we provided.
Speaker Change: Great. Thank you.
Operator: As there are no further questions in the queue at this time, this concludes our Q&A session. I would like to turn the call over back to Randall Lipps for closing remarks. Well, thank you for joining us.
Nchacha Etta: As there are no further questions at this time. This concludes our Q&A session I would like to turn the call over back to Randall Lipps for closing remarks.
Operator: <unk>.
Randall A. Lipps: Well, thank you for joining us today. It's really an exciting time at Omnicell to see this new innovation multi-year roadmap. It's really allowing us to engage with our customers and solve problems that have been pain points that haven't been addressed, and it really allows us to talk about the future with them.
Randall A. Lipps: Well. Thank you for joining us today, it's really an exciting time at Omnicell to see this new innovation multiyear road map.
Randall A. Lipps: It's really allowing us to engage with their customers and solving problems that have been pain points that haven't been addressed.
Randall A. Lipps: And it really allows us to talk about the future with them.
Operator: Not only the future of inpatient but outpatient and having a more holistic platform and approach to really innovate automation and deliver on the autonomous pharmacy is what the industry needs. I also want to thank the Omnicell employees. Thanks for the hard work and going through Q4 and launching off a good, refreshing year. And I look forward to seeing you next time. Cheers.
Randall A. Lipps: Not only the future of inpatient, but outpatient and having a more holistic platform and approach.
Operator: So really our innovate automation and deliver on the autonomous pharmacy is what the industry needs I also want to thank the omnicell employees. Thanks for the hard work and going through Q4, and the launching of a good refreshing year.
Operator: And I look forward to seeing you next time.
Operator: Cheers.
Speaker Change: Thank you.
Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.
Speaker Change: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.
Operator: [music].
Operator: Sure.