Q4 2024 Exagen Inc Earnings Call

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Operator: Again, we do thank you for your patience, and ask that you please remain on the line. Today's Exagen conference call will be beginning shortly.

[music].

Operator: ♪♪ Greetings, and welcome to Exagen, Inc. 4th Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode.

Speaker Change: Greetings and welcome to accident, Inc. Fourth quarter 2024 earnings conference call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone requires operator assistance during the conference. Please press Star zero.

Operator: A question and answer session will follow the formal presentation. If anyone requires operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded.

Speaker Change: On your telephone keypad as a reminder, this conference is being recorded.

Ryan Douglas: It is now my pleasure to introduce your host, Ryan Douglas, Investor Relations. Thank you. You may begin.

Speaker Change: It is now my pleasure to introduce your host Brian Douglas Investor Relations. Thank you you may begin.

John Aballi: Good morning, and thank you for joining us. Earlier today, Exagen, Inc. released financial results for the quarter and year ended December 31, 2020.

Speaker Change: Good morning, and thank you for joining US earlier today <unk> released financial results for the quarter and year ended December 31, 2020 for John <unk>, Our President and Chief Executive Officer, and Jeff Black Our Chief Financial Officer will host this morning's call a recording of today's call and the press release.

John Aballi: John Aballi, our President and Chief Executive Officer, and Jeff Black, our Chief Financial Officer, will host this morning's call.

Operator: A recording of today's call and the press release announcing our results can be found on the company's website at www.exagen.com.

Speaker Change: Announcing our results can be found on the company's website at www Dot <unk> dot com.

John Aballi: As today's call includes four looking statements, we encourage you to review the statements contained in today's press release and the risks and uncertainties described in our SEC filings, which identify certain factors that may cause the company's actual events, performance, and results to differ materially from those contained in the four looking statements made on today's call.

Speaker Change: Today's call includes forward looking statements. We encourage you to review the statements contained in today's press release and the risks and uncertainties described in our SEC filings, which identify certain factors that may cause the company's actual events performance and results to differ materially from those contained in the forward looking statements made on today's call. In addition.

John Aballi: In addition, we'll discuss non-GAAP financial measures on this call. Descriptions of these non-GAAP financial measures and reconciliations of GAAP to non-GAAP financial measures are included in today's press release.

Speaker Change: We will discuss non-GAAP financial measures on this call descriptions of these non-GAAP financial measures and reconciliations of GAAP to non-GAAP financial measures are included in today's press release.

John Aballi: I'll now turn the call over to John. Good morning, and thanks to everyone for being on the call today. I'll start off by recapping our results from 2024, give some color from the launch of our new markers and comment on our outlook for 2025.

John: I'll now turn the call over to John.

John: Good morning, and thanks to everyone for being on the call today I'll start off by Recapping our results from 2024 give some color from the launch of our new markers and comment on our outlook for 2025.

Jeffrey Black: Jeff will provide additional detail on the financials later in the call.

John: Jeff will provide additional detail on the financials later in the call.

John: 'twenty 'twenty four was a great year at X jet.

John Aballi: 2024 was a great year at X. We made major strides in continuing to build the leadership team needed to elevate our organization to the next wave of growth. And we've made significant progress in executing on our strategy towards profitability. From a top-line perspective, we've delivered another year of record total revenue, growing to $55.6 million, driven largely by continued improvement and reimbursement. With this progress, our adjusted EBITDA loss narrowed to approximately $10 million, showcasing our focus in prudently operating our business. Our trailing 12-month average selling price increased to $411 for advised CTD, a gain of $75 per test over 2023.

Jeff Black: We made major strides in continuing to build the leadership team needed to elevate our organization to the next wave of growth.

Jeff Black: And we've made significant progress in executing on our strategy towards profitability.

Jeff Black: From a topline perspective, we delivered another year of record total revenue growing to $55 $6 million driven largely by continued improvement in reimbursement.

Jeff Black: With this progress our adjusted EBITDA loss narrowed to approximately $10 million showcasing our focus and prudently operating our business.

Jeff Black: Our trailing 12 month average selling price increased to $411 for advise CTD a gain of $75 per test over 2023.

John Aballi: As a result of our ASP gains and continued excellent operational management, gross margins expanded just over 300 basis points in 2024 compared to the year prior. Coming in close to the 60% mark for the full year.

Jeff Black: As a result of our ASP gain and continued excellent operational management gross margins expanded just over 300 basis points in 2024 compared to the year prior.

Jeff Black: Coming in close to the 60% Mark for the full year.

John Aballi: Perhaps most importantly, we developed and commercialized new biomarkers for the first major enhancements to advise CTD since the product's inception. We also finished the year with an incredible achievement, testing our one millionth patient by BioCTD and are extremely proud of the many milestones our organization reached in 2024. To dive deeper into the launch of our new biomarkers this past January, I'm very proud of the hard work and preparation exhibited by our operational and commercial team. These efforts have resulted in a successful launch to the rheumatology community. The markers have been well received by our awarding physicians, and we are encouraged by the early signs we're seeing with both test volume and reimbursement.

Jeff Black: Perhaps most importantly, we developed and commercialized new Biomarkers for the first major enhancements to advise CTD since the product's inception.

Jeff Black: We also finished the year with an incredible achievement testing, our one millionth patient bye bye CTD and are extremely proud of the many milestones our organization reached in 2024.

Jeff Black: To dive deeper into the launch of our new Biomarkers. This past January I'm very proud of the hard work and preparation exhibited by our operational and commercial teams.

Jeff Black: These efforts have resulted in a successful launch to the rheumatology community.

Jeff Black: The markers have been well received by our ordering physicians and we are encouraged by the early signs, we're seeing with both test volume and reimbursement.

John Aballi: We've already started to see an impact on patient care with the utilization of the new markers. And while we're working diligently to educate clinicians on the value we've demonstrated through our clinical studies, it doesn't truly start to resonate with folks until they have a positive firsthand experience themselves.

Jeff Black: We've already started to see an impact on patient care with the utilization of the new markers and while we're working diligently to educate clinicians on the value. We have demonstrated through our clinical studies. It doesn't truly start to resonate with folks until they have a positive firsthand experience themselves.

John Aballi: To share an initial example of what we've heard already, in Florida, one of the rheumatologists who leverages advised testing in her practice received a new patient with a prior diagnosis of fibromyalgia. typically a diagnosis of exclusion. There were no serological abnormalities, and the patient was being treated for pain management. The patient was not responding to therapy, and given that it was a new patient, the clinician decided to run our enhanced CTD panel in their own evaluation. The entire profile came back negative, except for two of our new RA markers. which were abnormally high. The patient's diagnosis has since been changed to that of rheumatoid arthritis, and they've started first-line methotrexate therapy.

Jeff Black: To share an initial example of what we've heard already.

Jeff Black: In Florida, one of the Rheumatologists, who leverages advised testing in her practice received a new patient with a prior diagnosis of fibromyalgia.

Jeff Black: Typically a diagnosis of exclusion.

Jeff Black: There were no serological abnormalities and the patient was being treated for pain management. The patient was not responding to therapy or given that it was a new patient the clinician decided to run our enhanced CTD panel in their own evaluation.

Jeff Black: The entire profile came back negative except for two of our new RNA markers, which were abnormally high.

Jeff Black: The patient's diagnosis has since been changed to that of rheumatoid arthritis, and they've started first line methotrexate therapy.

John Aballi: This is a great example and case study of the impact we hope to have in the field. Obviously, the clinician is excited because this was a challenging patient who was refractorated treatment and the clinical presentation of the patient had similarities to RA but lacked biomarker confirmation. Now they have serological evidence to support a diagnosis and can proceed confidently with a treatment decision. Additionally, this specific type of serological presentation tends to respond well to methotrexate. So this has a higher likelihood of turning out positive for the patient long-term than the track they were on because the diagnosis was reached sooner, hopefully avoiding severe joint erosion, and points them to a specific therapy.

Jeff Black: This is a great example, and case study of the impact we hope to have in the field.

Jeff Black: Obviously, the clinician is excited because this was a challenging patient who was refractory to treatment and the clinical presentation that the patient had similarities to our E, but lacks biomarker confirmation.

Jeff Black: Now they have serological evidence to support a diagnosis and can proceed confidently with a treatment decision.

Jeff Black: Generally this specific type of serological presentation tends to respond well to methotrexate. So this is a higher likelihood of turning out positive for the patient long term than the track. They were on because the diagnosis was reached sooner hopefully avoiding severe join erosion and point them to a specific therapy.

John Aballi: Again, this is a great case study. We have several of these on the RA side, which have come in. So it's very exciting to see the initial results. Overall, the feedback has been more heavily weighted towards the RA impact, but we are also hearing positive things on the lupus side with our new T-cell markers. Physicians are still learning exactly what these markers mean, especially in the context of an otherwise negative advised profile.

Jeff Black: Again. This is a great case study we have several of these on the RF side, which have come in so it's very exciting to see the initial results here.

Jeff Black: Overall, the feedback has been more heavily weighted towards the or a impact but we're also hearing positive things on the loop side with our new T cell markers.

Jeff Black: Physicians are still learning exactly what these markers me, especially in the context of an otherwise negative advice profile, but luckily our manuscript detailing the unique additional benefit of T cell analytes was accepted and published in a high impact journal frontiers in immunology less than two weeks ago.

John Aballi: But luckily, our manuscript detailing the unique additional benefit of T cell analytes was accepted and published in a high-impact journal, Frontiers in Immunology, less than two weeks ago.

John Aballi: We really believe that our publication marks a significant step towards establishing T-cell biomarkers as a powerful tool for SLE diagnosis, as the publication details their superior and unique performance compared to conventional analytes. The study was a collaboration with four leading lupus KOLs, providing significant validation of our work within the rheumatology community. Their collaboration not only strengthens the scientific foundation of our findings, but also reinforces the broader clinical relevance of our assays in lupus diagnosis and disease management.

Jeff Black: We really believe that our publication marks a significant step towards establishing T cell biomarkers as a powerful tool for SLE diagnosis.

Jeff Black: The publication details, they're superior and unique performance compared to conventional analytes.

Jeff Black: The study was a collaboration with four leading lupus kols, providing significant validation of our work within the rheumatology community.

Jeff Black: Their collaboration not only strengthens the scientific foundation of our findings, but also reinforces the broader clinical relevance of our assays in lupus diagnosis and disease management.

John Aballi: This will be an essential tool in our educational campaign over the coming quarter. At this point in the launch, it's still too early to provide a precise indication as to the full financial impact the markers will have, but we are seeing approximately $90 per advised CTD test in incremental revenue, and it could grow from here as we continue to gather details on our appeal success rate. The $90 value is assumed for our Q1 guidance, and we'll have a more confident number as additional data come in by our Q1 call, where we plan to provide an extended outlook for 2025.

Jeff Black: This will be an essential tool in our educational campaign over the coming quarters.

Jeff Black: At this point in the launch it's still too early to provide a precise indication as to the full financial impact of markers will have but we are seeing approximately $90 per advise CTD test and incremental revenue and it could grow from here as we continue to gather details on our appeal success rates.

Jeff Black: The 90 dollar value is assumed for our Q1 guidance and we will have a more confident number as additional data come in by our Q1 call, where we plan to provide an extended outlook for 2025.

John Aballi: In short, and just to reemphasize this milestone for our organization, as it is truly a marquee accomplishment from the efforts last year, the additions of our T cell and RA33 biomarkers to our advised profile are catalysts on several fronts. First, they were developed and intended to have a significant positive impact on patient care. And we are already seeing signs of that through clinical adoption and case studies. Second, they widen the gap on the clinical differentiation Exagen offers over our competition. We already have the lead in novel proprietary testing for best-in-class connective tissue diagrams. Third, our RA biomarkers open up a population of patients and clinicians that to date we have not meaningfully addressed, which could represent a market opportunity that is anticipated to be larger than our existing lupus market.

Jeff Black: In short and just to reemphasize this milestone for our organization as it is truly a marquee accomplishment from the efforts last year the.

Jeff Black: The additions of our T cell <unk> or a 33 biomarkers to our advised profile our catalysts on several fronts.

Jeff Black: First they were developed and intended to have a significant positive impact on patient care and we are already seeing signs of that through clinical adoption and case studies.

Jeff Black: Second they widen the gap on the clinical differentiation exigent offers over our competition.

Jeff Black: We already have the lead in novel proprietary testing for best in class connective tissue diagnosed.

Jeff Black: Third our RNA Biomarkers open up a population of patients and clinicians that to date, we have not meaningfully addressed which could represent a market opportunity that is anticipated to be larger than our existing lupus market.

Jeff Black: Fourth.

John Aballi: These product launches validate our ability to focus, prioritize, and execute on R&D pipeline initiatives that have a high impact and bring them to the clinic in a rapid manner. The addition of these biomarkers are the first of more to come.

Jeff Black: These product launches validate our ability to focus prioritize and execute on R&D pipeline initiatives that have a high impact and bring them to the clinic in a rapid manner.

Jeff Black: The addition of these biomarkers are the first of more to come.

John Aballi: And I look forward to continuing to share the full impact these markers have on patients and our company, along with additional progress from our pipeline in the future.

Jeff Black: And I look forward to continuing to share the full impact these markers have on patients and our company along with additional progress from our pipeline in the future.

John Aballi: With the momentum we had to start the year, we're very excited about what's ahead in 2015. We continue to expect strong revenue growth driven by both ASP expansion and volume. And on that note, our performance relative to testing volume in 2024 did not meet our expectations and has been an area of heightened focus since the changes we implemented in 2023 to prioritize profitable volume. Again, some of this volume decline was expected and deliberate, as we have prioritized profitable growth, but we have to do better this year, and we're off to a good start with the launch of these new markets.

Jeff Black: With the momentum we have to start the year, we're very excited about what's ahead in 'twenty five.

Jeff Black: We continue to expect strong revenue growth driven by both ASP expansion and volume.

And on that note our performance relative to testing volume in 2024 did not meet our expectations and has been an area of heightened focus since the changes we implemented in 2023 to prioritize profitable volume.

Jeff Black: Again, some of this volume decline was expected and deliberate as we prioritize profitable growth, but we have to do better this year and we're off to a good start with the launch of these new markers.

John Aballi: As our ASP increases, the profitability of our sales territories also increase, which opens the door for expansion.

Jeff Black: As our ASP increases the profitability of our sales territories also increase which opens the door for expansion.

John Aballi: We are currently operating at 40 sales territories and anticipate adding a handful of new territories during 2025 in a measured fashion, but to continue to accelerate the utilization of advice in clinical practice.

Jeff Black: We are currently operating at 40 sales territories and anticipate adding a handful of new territories. During 2025 in a measured fashion, but to continue to accelerate the utilization of advice in clinical practice.

John Aballi: Taking a step back at the end of the year to reflect on our transformation these past 30 months, I'm incredibly proud of what this team has been able to accomplish. It is not common to reduce losses by 70-plus percent, driven mostly by reductions to OPEX, and still grow our top line. Our 40% or more gains to ASP over the past two years are uncommon within this industry.

Jeff Black: Taking a step back at the end of the year to reflect on our transformation. These past 30 months I'm incredibly proud of what this team has been able to accomplish.

Jeff Black: It is not common to reduce losses by 70, plus percent driven mostly by reductions to opex and still grow our topline.

Jeff Black: Our 40% or more gains to asps over the past two years are uncommon within this industry and while we've demonstrated this type of performance we have dramatically improved the company culture, reducing voluntary turnover by more than two thirds of what it was when it came to the organization.

John Aballi: And while we've demonstrated this type of performance, we've dramatically improved the company culture, reducing voluntary turnover by more than two-thirds of what it was when I came to the organization. People are better aligned to our overall goals, they understand the critical aims we need to accomplish, and as we've made progress, it's fueled the motivation within the company's walls for the next horizon.

Jeff Black: People are better aligned to our overall goals. They understand the critical aims we need to accomplish and as we've made progress it's fueled the motivation within the company's walls for the next horizon.

John Aballi: Specifically, I'm incredibly proud of our R&D and CLIA teams for their development of these new assays, achieving the regulatory approvals and the commercial launch we undertook to start the year. As business partners, rest assured that you have a strong leadership team, which is focused on creating long-term value, and we've started to really generate momentum.

Jeff Black: Specifically I'm incredibly proud of our R&D and clear teams for their development of these new assays, achieving the regulatory approvals and the commercial launch we undertook to start the year.

Speaker Change: As business partners rest assured that you have a strong leadership team, which is focused on creating long term value.

Jeff Black: And we started to really generate momentum.

John Aballi: We believe 2025 will be a step function for our growth, and I fully anticipate finding more opportunistic and creative ways to serve our existing customers while expanding our customer base in the future.

Jeff Black: We believe 2025 will be a step function for our growth and I fully anticipate finding more opportunistic and creative ways to serve our existing company customers, while expanding our customer base in the future.

Jeffrey Black: I'll now turn it over to Jeff for details on our financial results. Thank you, John, and good morning, everybody. As John mentioned, 2024 was a great year for the organization on several fronts. The team did a great job of executing and exceeding our goals for the year. We've set records for several of our financial metrics and have a clear line of sight to expand on those in 2025. Diving into details, starting with revenue, our full year revenue reached a record $55.6 million, marking a 6% increase from 2023. And this full year, year-over-year increase in revenue was due primarily to expansion in ASP, consistent with our strategy of driving profitable revenue.

Jeff Black: I'll now turn it over to Jeff for details on our financial results.

Jeff Black: Thank you John and good morning, everybody as John mentioned 2024 was a great year for the organization on several fronts.

Jeff Black: Team did a great job of executing exceeding our goals for the year. We set records for several of our financial metrics and have a clear line of sight to expand on those in 2025 getting into details starting with revenue our full year revenue reached a record $55 6 million, marking a 6% increase from 2023.

Jeff Black: And this full year year over year increase in revenue was due primarily to expansion in asps.

Jeff Black: Consistent with our strategy of driving profitable revenue.

Jeffrey Black: As John mentioned, our trailing 12-month ASP for 2024 was $411, up $75 in 2024, and up $126 since 2022.

As John mentioned, our trailing 12 month Asps for 2024 was $411 up $75 in 2024 and up $126 since 2020 to.

Jeffrey Black: when John initiated a strategy to focus on reimbursement. We've continued to prioritize improvements in our revised CTD average selling price through optimizing revenue cycle management with much success, but sometimes at the expense of volume growth, which was intentional. As a result, we saw an expected decline in volume due to attrition from doctors who were unable to support the necessary partnership, including additional documentation often required for acceptable reimbursement levels. We also, over the same two-year period, made the strategic decision to reduce our commercial footprint from over 60 sales territories at the end of 2022 to roughly 40 at the end of 2024, eliminating several unprofitable sales channels.

Jeff Black: When John initiated a strategy to focus on reimbursement.

Jeff Black: We've continued to prioritize improvements in our revised CTD average selling price through optimizing revenue cycle management with much success, but sometimes at the expense of volume growth, which was intentional as.

Jeff Black: As a result, we saw an expected decline in volume due to attrition from doctors, who are unable to support the necessary partnerships, including additional documentation offer required for acceptable reimbursement levels.

Jeff Black: We also over the same two year period made the strategic decision to reduce our commercial footprint from over 60 sales territories at the end of 2022 to roughly 40 at the end of 2020 for eliminating several unprofitable sales channels.

Jeffrey Black: This, too, resulted in an expected decline in volume. Moving forward, we continue to prioritize ASB expansion but expect to see a return to volume growth attributed to increased adoption from the enhanced utility provided by our BioCT biomarkers and the addition of commercial territories with a focus on growing profit. While we don't believe 6% revenue growth represents the long-term trajectory of the business, keep in mind that we continue to grow revenue and expand gross margins while simultaneously significantly lowering our overall expense structure, which is a great setup as we enter a period of expected volume growth, continued ASP improvement, and a shift to positive adjusted EBITDA and free cash flow.

Jeff Black: This two resulted in an expected decline in volume.

Jeff Black: Moving forward, we continue to prioritize the expansion, but expect to see a return to volume growth attributed to increased adoption from the enhanced utility provided by our <unk> Biomarkers and the addition of commercial territories with a focus on growing profitably.

Jeff Black: Well, we don't believe 6% revenue growth represents the long term trajectory of the business keep in mind, we continue to grow revenue and expand gross margins, while simultaneously significantly lowering our overall expense structure, which is a great setup as we enter a period of expected volume growth.

Jeff Black: <unk> ASP improvements and a shift to positive adjusted EBITDA and free cash flow.

Jeffrey Black: Moving to operating performance, gross margin was just under 60% in 2024, compared to 56% in 2023. And the growth in gross margin was mainly attributed to increases in ASP. Gross margin was about 62% for the fourth quarter, compared to 59% for the fourth quarter of 2023. We expect gross margin will continue to expand in 2025 with the addition of our new markers, which are a CRE of the margin, and by continuing to streamline workloads in the lab. Over time, we believe we can expand gross margins well into the mid-60% range.

Jeff Black: Moving to operating performance gross margin was just under 60% in 2024 compared to 56% in 2023.

Jeff Black: And the growth in gross margin was mainly attributed to increases in ASP.

Jeff Black: Gross margin was about 62% for the fourth quarter compared to 59% for the fourth quarter of 2023.

Jeff Black: We expect gross margin will continue to expand in 2025 with the addition of our new markers, which are accretive to margins and by continuing to streamline workflows in the lab.

Jeff Black: Over time, we believe we can expand gross margins well into the mid 60% range.

Jeffrey Black: Turning to expenses, our operating expenses in 2024 were $46.7 million, down $5.5 million or 10.5% from 2023. Fourth quarter OPEX was $11.9 million, down from $13.3 million in the fourth quarter of 2023. Breaking out our full year OPEX, of the $46.7 million in 2024, about $41 million came from SG&A, which was a decrease of 13% from 2023. And looking at SG&A composition for 2024, excluding non-cash stock compensation, sales and marketing was roughly flat, while G&A was down over 17% as we prioritized our spend on growth initiatives. R&D accounted for $5.4 million of the $46.7 million in OPEX in 2024 and excluding stock-based compensation, R&D was up 12% mainly due to the ramp-up for the launch of our new markers.

Jeff Black: Turning to expenses, our operating expenses in 2024 were $46 7 million down $5 5 million or 10, 5% from 2023.

Jeff Black: Fourth quarter, Opex was $11 9 million down from $13 3 million in the fourth quarter of 'twenty three breaking out our full year Opex of $46 7 million in 2024 about 41 million came from SG&A, which was a decrease of 13% from 2023 and.

Jeff Black: And looking at SG&A composition for 2024, excluding noncash stock compensation sales and marketing was roughly flat, while G&A was down over 17% as we prioritize our spend on growth initiatives.

Jeff Black: R&D accounted for $5 4 million of the $46 7 million in Opex in 2024, and excluding stock based compensation R&D was up 12%, mainly due to the ramp up for the launch of our new markers.

Jeffrey Black: Our team has done a great job of controlling expenses and it's remarkable to see a decrease in operating expenses during a time when we added approximately 25 people to headcount and continue to face inflationary headwinds. We've been able to reduce overall outbacks while continuing to maintain focused investments in our commercial organization and our R&D pipeline to support sustained long-term revenue growth. And we will continue to manage this balance thoughtfully. With that said, we continue to see improvements on the bottom line with adjusted EBITDA loss coming in at $10.1 million for 2024 and an improvement of 40% over 2023.

Jeff Black: Our team has done a great job of controlling expenses and it's remarkable to see a decrease in operating expenses. During a time when we added approximately 25 people to head count and continue to face inflationary headwinds.

Jeff Black: We've been able to reduce.

Jeff Black: Overall, Opex will continue to maintain focus investments in our commercial organization and our R&D pipeline to support sustained long term revenue growth and we will continue to manage this balanced thoughtfully.

With that said, we continue to see improvements on the bottom line with adjusted EBITDA loss coming in at $10 1 million for 2024, an improvement of 40% over 2023.

Jeffrey Black: As a reminder, our adjusted EBITDA excludes stock competence expense since it's a non-cash expense.

Jeff Black: As a reminder, our adjusted EBITDA excludes stock comp expense is a noncash expense.

Jeffrey Black: Please refer to our earnings release issued earlier today for a reconciliation of adjusted EBITDA to net loss. In 2025, as we continue to control expenses and expand ASPN revenue, we anticipate being adjusted EBITDA positive in the fourth quarter of 2025, which will mark a key milestone in the organization's turnaround. Turning to cash flow on the balance sheet, we ended 2024 with cash, cash equivalent and restricted cash of 22.2 million, representing a net neutral cash burn for the fourth quarter. Our accounts receivable balance at the end of 2024 was just under $8 million. In 2025, as in previous years, we will begin the year by holding most claims in line with our strategy to maximize our revenue cycle.

Jeff Black: Please refer to our earnings release issued earlier today for a reconciliation of adjusted EBITDA to net loss.

Jeff Black: In 2025, as we continue to control expenses and expand ESPN revenue, we anticipate being adjusted EBITDA positive in the fourth quarter of 2025, which will Mark a key milestone in the organization as turnarounds.

Jeff Black: Okay.

Jeff Black: Turning to cash flow and the balance sheet.

Jeff Black: And in 2024 with cash cash equivalents and restricted cash of $22 2 million, representing a net neutral cash burn for the fourth quarter.

Jeff Black: Accounts receivable balance at the end of 2024 was just under $8 million in 2025 as in previous years, we will begin the year by holding most claims in line with our strategy to maximize our revenue cycle.

Jeffrey Black: This will lead to an increase in AR and subsequent higher cash use as seen in previous years. but will normalize over the back half of the year. We believe our balance sheet today gives us the runway we need to take our business to sustain free cash flow positivity for the full year 2026 and beyond, and remain committed to creating and preserving long-term value for our shareholders.

Jeff Black: This will lead to an increase in <unk> and subsequent higher cash use as seen in previous years.

Jeff Black: So it will normalize over the back half of the year.

Jeff Black: We believe our balance sheet today gives us the runway we need to take our business to sustained free cash flow positivity for the full year 2026, and beyond and remain committed to creating and preserving long term value for our shareholders.

Jeffrey Black: In regard to 2025 guidance, we are providing total revenue guidance of at least $14.5 million for the first quarter. And as mentioned earlier, we're on track to deliver positive adjusted EBITDA in the fourth quarter.

Jeff Black: In regard to 2025 guidance, we are providing tool revenue guidance of at least $14 5 million for the first quarter and as Matt mentioned earlier, we are on track to deliver positive adjusted EBITDA in the fourth quarter.

Jeffrey Black: We plan to share our full year 2025 financial outlook with the release of our first quarter 2025 financial results.

Jeff Black: Plan to share our full year 2025 financial outlook with the release of our first quarter 2025 financial results.

Operator: We'll now open the call up for questions. Thank you.

Jeff Black: We'll now open the call up for questions.

Speaker Change: Thank you the floor is now open for questions. If you would like to ask a question. Please press star one on your telephone keypad at this time all confirmation tone will indicate that your line is in the question queue. You May press star two if he would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up the hill.

Operator: The floor is now open for questions. If you would like to ask a question, please press star 1 on your telephone keypad at this time. A confirmation tone will indicate that your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. Again, that's star 1 to register a question at this time.

Speaker Change: Before pressing the star Keys again, Thats Star one to register a question at this time.

Kyle Mikson: Today's first question is coming from Kyle Mikson of Canaccord Genuity. Please go ahead. Hey, guys, thanks for the questions. Congrats on the year. Could you, um, you know, I know, John, you're talking about, like, you can't really quantify the impact from the new markers just yet. But is there just any way to help us think about maybe the modeling for ASP going forward based on these new markers, how that could trend this year? And then I think importantly, like the gross margin impact too from those from this like $90 incremental revenue we're talking about, too.

Speaker Change: Today's first question is coming from Carl Mixon of Canaccord Genuity. Please go ahead.

Speaker Change: Hey, guys. Thanks for the questions. Congrats on the year could you I know John you were talking about like you can't really quantify the impact from the new markers just yet.

Speaker Change: But is there just.

Speaker Change: Just any way to help us think about maybe the Walden for ISP going forward based on some new markers how that could trend. This year and then I think importantly about the gross margin get back to from those from the second $90 I think.

Kyle Mikson: If you could just talk about those factors would be great.

Speaker Change: Revenue, we're talking about if you could just how all those factors would be great. Thanks.

John Aballi: Hey, Kyle. Good morning. Appreciate the question. Thanks for the chance to expand. So, as it relates to the trend for the new marker reimbursement, the $90 specifically, the reason we're unable to exactly give the clarity for full 2025 right now is because, you know, we've been efficient and effective in our appeals process over time, and it just takes a little bit of time for that to bear out. So, the $90 right now is based on current cash collections plus some assumption for efficacy in our appeals process or revenue cycle process, and I think it's a pretty good approximation for right now.

Speaker Change: Hey, good morning, I appreciate the question thanks for the chance to expand so.

Speaker Change: As it relates to the trend for the new marker reimbursement the $90 specifically the reason we're unable to exact.

Speaker Change: Exactly give the clarity for full 2025, right now is because we've been efficient and effective in our appeals process over time and it just takes a little bit of time for that to bear out. So the $90 right now is based on current cash collections plus.

Some assumption for efficacy in our appeals processor revenue cycle.

Speaker Change: Our process and I think it's a pretty good approximation for right now so.

John Aballi: So, where that could trend, I think, similarly to what you're seeing with our broader business, is we're effective and efficient in our ability to drive ASP gains. So, it could likely trend up. You know, it's not going to reach the $200 mark. I think that's unreasonable, so it's not going to double, but it could creep up from there. We'll know more in our Q1 call, so maybe a month and a half, two months from now, as more of the appeal efforts come in, but it's a more straightforward billing process, and so I think it's a pretty reasonable approximation.

Where that could trend I think similarly to what you're seeing with our broader businesses, we're effective and efficient in our.

Speaker Change: The ability to drive ASP gains so it could likely trend up.

Speaker Change: Not going to reach the $200 Mark I think thats unreasonable, that's not going to double.

Speaker Change: But it could creep up from there we'll know more in.

Speaker Change: Our Q1 call so maybe a month and a half two months from now.

Speaker Change: As more of the appeal efforts come in.

Speaker Change: But it is a more straightforward billing process and so I think it's a pretty reasonable approximation.

John Aballi: As it relates to gross margin, your question was more broadly, what's the base business trending over time? Is that right, Kyle? Yeah, and I think the impact from the markers would be good to know as well given that, you know, an ASP lift, so that you would think that the margin is better or worse, you know, the same if not better, so it could help calm the gross margin. Got it. So we believe now with the addition of these new markers, the mid 60s is not an unreasonable expectation for margins over time. And so we'll have to see.

Speaker Change: As it relates to gross margin. Your question was more broadly what's the base business trending over time is that right now.

Speaker Change: Yes, and I think the impact from the the markers.

Speaker Change: Well given that ASP lift so that you would think about the margin is better or worse.

Speaker Change: The same if not better so it could help.

Speaker Change: On the gross margin yes.

Speaker Change: Got it so we believe now with the addition of these new markers. The mid <unk> is not an unreasonable expectation for margins over time.

Speaker Change: And so we'll have to see.

John Aballi: I don't anticipate guiding necessarily on margins, but that mid 60 level is within reach.

Speaker Change: I don't anticipate guiding necessarily on margins, but that mid 60 level is within reach.

Kyle Mikson: Awesome.

Speaker Change: Awesome and then Jeff maybe one for you on.

Kyle Mikson: And then, Jeff, maybe one for you on, you know, the adjusted EBITDA profitability target for 4Q, that's great to see. Do you also have like an operating cash flow positive or breakeven target as well for 4Q? And maybe you could talk about that as well as the accounts receivable movement you expect throughout the year as well.

Speaker Change: The adjusted EBITDA profitability target for <unk>, and that's great to see do you also have like an operating cash flow positive or breakeven target as well for <unk> and maybe you can talk about that as well as the accounts receivable movement, you expect throughout the year as well.

Jeffrey Black: Yeah, Kyle, great. Thanks for the question. Yeah, I think as you think about on a full year basis, in our business, adjusted EBITDA is a good proxy for free cash flow, at least on a full year basis. The nuance being that the quarter quarter working capital impact of holding claims, particularly in the first quarter, will increase cash requirements early in any year. But over over the course of a year on a blended basis, I think thinking about adjusted EBITDA and free cash flow as a proxy for one another is the right way to think about it.

Speaker Change: Yes.

Speaker Change: Great. Thanks for the question, Yes, I think as you think about on a full year basis in our business. Adjusted EBITDA is a good proxy for free cash flow and return of a full year basis, the nuance being that the quarter to quarter working capital impact of holding claims, particularly in the first quarter will increase cash.

It's early in any year.

Speaker Change: Over over the course of the year on a blended basis, I think thinking about adjusted EBITDA and free cash flow as a proxy for one another is the right way to think about it.

Kyle Mikson: Great.

Speaker Change: Great and one last one for you John on them actually be kind of lumpy as your update on that.

John Aballi: And the last one for you, John, on actually kind of want to ask your update on kind of your thoughts to offer tests or test data to biopharma companies, like there's been a lot of news flow, even in the past few weeks, kind of regarding SLE drugs and so forth. Is there an opportunity there for you as a partner to pharma, given your industry-leading position? We believe there is, you know, our efforts on the biopharmicide were. really early when I joined the organization. I think we necessarily, the business model was more capitalizing on inbound inquiries as opposed to having a selling process and actively cultivating partners that had some strategic impact and where we thought we could provide a unique service or solution.

Speaker Change: What are your thoughts to offer tests for test data to Biopharma companies like Theres been a lot of news flow.

Speaker Change: The past few weeks regarding ethylene drugs and so forth is there an opportunity there for you.

Speaker Change: Partner to pharma, given your industry leading position.

Speaker Change: We believe there is.

Speaker Change: Our efforts on the Biopharma side, where.

Speaker Change: <unk>.

Speaker Change: Really early when I joined the organization I think we necessarily the business model was more capitalizing on inbound inquiries as opposed to having a selling process and activate the cultivating partners that had some strategic impact.

Speaker Change: We thought we can provide a unique service or solution that has shifted since I've been on board and as I detailed in 'twenty four we're pretty excited about some of the contract changes we've seen along with the magnitude of some of those contracts. The revenue from that comes in over a couple year period, we should start to see more.

John Aballi: That has shifted since I've been on board and as I detailed in 24, we're pretty excited about some of the contract changes we've seen along with the magnitude of those contracts. The revenue from that comes in over a couple year period. We should start to see more of that here in 25 and very positive from our standpoint. There's some exciting development. We do think that there's a tailwind in terms of the market growth there. Spending on the auto immune side from a biopharmaceutical standpoint is projected to increase over time. So it's a healthy area for investment.

Speaker Change: More of that here in 'twenty five and.

Speaker Change: Very positive from our standpoint Theres some exciting development. We do think that there is a tailwind in terms of the market growth, they're spending on the autoimmune side from our Biopharma standpoint is projected to increase over time. So it's a healthy area for investment we're looking to capitalize on it and we do have unique proprietary offerings, we have a group of right.

John Aballi: We're looking to capitalize on it and we do have unique proprietary offerings. We have a group of right now about four individuals that this is really the area they focus on. So more to come throughout the year. I think you'll start to see some of the efforts we're putting in place and it'll be exciting to give you guys some updates, but it's definitely a positive area for us.

Speaker Change: How about for individuals that this is really the area they focus on so more.

Speaker Change: More to come throughout the year I think youll start to see some of the efforts, we're putting in place and it'll be exciting to give you guys. Some updates.

Speaker Change: But it's definitely a positive area for us.

Kyle Mikson: Thanks guys, appreciate it.

Robson: Yes, it sounds Robson thanks, guys I appreciate it.

Speaker Change: Thanks Scott.

Operator: Thank you.

Speaker Change: Thank you. The next question is coming from Ross Osborne of Cantor Fitzgerald. Please go ahead.

Ross Osborn: The next question is coming from Ross Osborn of Cantor Fitzgerald. Please go ahead. Hi, good morning, and congrats on the progress.

Ross Osborne: Hi, good morning, and congrats on the progress Star.

Ross Osborn: Starting off, would you remind us on where the January launch of RA-33 will get you in terms of sensitivity, and if there are any incremental improvements we should be thinking about this year? Yeah. Hey, Ross. Good morning. Thanks for the opportunity to talk clinically. Our January launch encompassed a set of two additional aspects to our test. The first being the launch of novel T-cell biomarkers, which specifically improves the sensitivity for lupus diagnosis. And we just actually published our manuscript in Frontiers in Immunology, pretty exciting publication, very strong KOL support. And what that manuscript showed was for the lupus patients that were serologically negative, so their diagnosis was based solely on clinical aspects alone, the novel T-cell markers, the three of which we launched, were positive in roughly 51% of those patients.

Speaker Change: Starting off would you remind us on where the January launch of RH every three will get you in terms of sensitivity.

Ross Osborne: There are any incremental improvements we should be thinking about this year.

Speaker Change: Yeah, Hey, Ross good morning, Thanks for the opportunity to talk clinically so.

Speaker Change: Our January launch encompassed a set of too.

Speaker Change: Additional aspects to our test.

Speaker Change: The launch of novel T cell, Biomarkers, which specifically improves the sensitivity for lupus diagnosis.

Speaker Change: And we just actually published a manuscript.

Speaker Change: In immunology pretty exciting publication very strong kols support and what that manuscript showed was for the lupus patients that were Sarah logically negative. So their diagnosis was based solely on clinical aspects alone. The novel T cell markers, the three of which we launched were positive.

Speaker Change: Roughly 51% of those patients so the way to think about this is obviously a cohort to cohort you have different variables and whatnot, but a good way to think about this is we captured roughly half.

John Aballi: So the way to think about this is obviously, you know, cohort to cohort, you have different variables and whatnot. But a good way to think about this is we captured roughly half of the lupus patients that were not captured by conventional markers or our traditional advised testing. So you know, ultimately that boosts sensitivity in our mind closer to about, we're capturing nine out of ten lupus patients through our entire advised test, which is an exciting development for us.

Speaker Change: Lupus patients that were not captured by conventional markers or our traditional advice testing so ultimately.

Speaker Change: Ultimately that boost.

Speaker Change: Sensitivity.

Speaker Change: In our mind closer to about we're capturing nine out of 10.

Speaker Change: Lupus patients through our entire advice test.

Speaker Change: Which is an exciting development for us on the rheumatoid arthritis side.

John Aballi: On the rheumatoid arthritis side, what we launched there were the first set of some novel biomarkers improving the sensitivity for diagnosis, specifically within the traditionally seronegative population. And from a rheumatoid arthritis standpoint, there's some fantastic biomarkers that exist, rheumatoid factor, act-by-antibodies, but about 30% of patients... have no serological abnormalities. So their diagnosis is purely clinical, very similar to what I just described on the lupus side. In that context, this first set of markers captures. about 15, 16% of those patients. And we have a second set of markers coming later this year, hopefully by the end of the year, that will boost that overall to about 30, 40%.

Speaker Change: What we launched there were the first set of some novel Biomarkers, improving the sensitivity for a diagnosis specifically within the traditionally sterile negative population.

Speaker Change: And from a rheumatoid arthritis standpoint, there are some fantastic biomarkers that exists rheumatoid factor <unk> antibodies.

Speaker Change: But about 30% of patients.

Speaker Change: Have no serological abnormality. So their diagnosis is purely clinical very similar to what I've. Just described on the on the lupus side in that context.

Speaker Change: This first set of markers captures.

Speaker Change: About 15%, 16% of those patients and we have a second set of markers coming later this year hopefully by the end of the year.

Speaker Change: That will boost that overall to about 30% 40%.

Ross Osborn: So in general, we believe that within the next, call it 12 months or so, we should be able to capture almost half of the seronegative population. And that by far outpaces any other diagnostic that is commercially available. So very excited about both of those aspects. Great, glad to hear it.

Speaker Change: So in general we believe that within the next call. It 12 months or so we should be able to capture almost half of the show negative population and that by far outpaces.

Speaker Change: Any other diagnostic that is commercially available.

Speaker Change: Available so very excited about both of those aspects.

Speaker Change: Great glad to hear it and then where does manufacturing stand in terms of capacity and how do you feel about your ability to meet demand this year.

John Aballi: And then where does manufacturing stand in terms of capacity? And how do you feel about your ability to meet demand this year? That's a great question. So we invested heavily from a capacity standpoint towards the end of the year in any capital equipment we needed. Our more complex technology is flow cytometry. We did an entire upgrade of our suite of instruments in the back half of 24. That was about a $1.2 million investment. That's all been made. We have significant investment in robotics that we've made over the last six months and will continue to do so here into 2025.

Speaker Change: That's a great question. So we invested heavily from a capacity standpoint towards the end of the year and any capital.

Speaker Change: Equipment, we needed.

Speaker Change: More complex technology as flow cytometry, we did it.

Speaker Change: Entire upgrade of our suite.

Speaker Change: <unk>.

Speaker Change: Instruments in the back half of 'twenty four that was about a $1.2 million investment. That's all been made we have significant investment in robotics that we've made over the last six months and we will continue to do so here into 2025 personnel wise, we staffed up for the increased volume that we expect and are starting to see here.

John Aballi: Personnel-wise, we've staffed up for the increased volume that we expect and have started to see here in 2025. So current capacity is adequate for the launch. We expect to scale with labor, basically, and capital-wise, we feel like we're in a pretty good shape, at least for 2025 and into 2026. Our facilities have the capacity, significant more capacity than the current testing volume. And what I mean by that is, you know, we operate mostly, primarily a day shift, starts about 4 in the morning, goes to about 8 at night, that's a day shift for us, but can also go into the evening.

Speaker Change: <unk> and 'twenty five so.

Speaker Change: Current capacity is adequate for the launch we expect to scale with labor basically and capital wise, we feel like we're in a pretty good shape at least for 25 and enter 2006, our facilities have the capacity.

Significant more capacity than the current testing volume and what I mean by that is we operate mostly primarily a day shift.

Speaker Change: It's about four in the morning goes to about eight at night, that's the day shift for us and but can also go into the evening and so we could have a night shift if need be to preserve the viability and to increase our capacity and it wouldn't require change from a capital standpoint, our facility standpoint. So.

John Aballi: And so we could have a night shift, if need be, to preserve the viability and to increase our capacity, and it wouldn't require a change from a capital standpoint or facility standpoint. So, have some buffer there.

Speaker Change: Have some buffer there.

Ross Osborn: Thanks for taking our questions and congrats again on the progress. Thank you.

Ross Osborne: Thanks for taking my questions and congrats again on the progress Thanks Ross.

Mark Massaro: The next question is coming from Mark Massaro of BTIG. Please go ahead. Hey guys, thank you for taking the questions.

Mark Massaro: Thank you. The next question is coming from Mark Massaro of BPI. Please go ahead.

Mark Massaro: Hey, guys. Thank you for taking the questions.

John Aballi: John, the first one's for you. I thought the case study you provided in the prepared remarks was pretty interesting in that the patient's diagnosis was changed from fibromyalgia to rheumatoid arthritis. With that case study, and it sounds like you had a few others come in that were similar, are you now thinking that potentially the advised product might have a larger total addressable market to rule in RA versus lupus, or how should we think about the market size for the core product? Yeah, good morning, Mark. It is a pretty interesting case study because it came to us unsolicited, by the way.

Speaker Change: John The first one is for you I thought the case study you provided in the prepared remarks was pretty interesting.

Speaker Change: In that the patient's diagnosis was changed from fibromyalgia to rheumatoid arthritis.

Speaker Change: With that case study and it sounds like you had a few others come in that were similar.

Speaker Change: Now thinking that potentially the device product might have a larger total addressable market to rule in our eight versus lupus or how should we think about.

Speaker Change: The market size for the core product.

Mark Massaro: Yeah. Good morning, Mark is a pretty interesting case study because it came to us and solicited by the way.

John Aballi: You know, that clinician was super excited about their firsthand experience, and it's always nice, you know, to get that feedback. We've had it happen in a few other places, and I was actually in the field last week talking to a group of physicians, and it's very clear that they're enamored and interested about these new markers and see the applicability to their clinical practice. So, exciting, you know, when you actually get to see it firsthand in that sense. As it relates to your question, what do we think the market opportunity is and how has it shifted with the launch of these new markers?

Mark Massaro: And that clinician was super excited about their firsthand experience and it's always nice to get that feedback we've had it happened in a few other places and I was actually in the field last week talking to.

Mark Massaro: A group of physicians and it's very clear that they are enamored and interested in the about these new markers and see the applicability to their clinical practice. So exciting when you actually get to see it firsthand in that sense as it relates to your question. What do we think the market opportunity is and how has it shifted with the launch of these new Mark.

John Aballi: I do believe, I mean, you know, I think it's pretty rational thought here that as you enhance your value proposition on the RA side, the utility for clinicians in that context increases, and that's what we believe currently, and I believe it's actually starting to pan out as we think. From our standpoint, rheumatoid arthritis prevalence is... depending on your sources, somewhere around eight times that of systemic lupus. So a dramatically different size market. We do believe that the differential broadens, the utility of the differential diagnosis broadens when we added these additional RA markers, and we'll continue to do so throughout the year as we add additional waves to this.

Mark Massaro: <unk> I do believe I mean.

I think it's pretty rational thought here that as you enhance your value proposition on the RF side, the utility for clinicians in that context increases.

Mark Massaro: And Thats, what we believe currently in I believe it's actually starting to Pan out.

Mark Massaro: As we think so.

Mark Massaro: From our standpoint, rheumatoid arthritis prevalence is.

Mark Massaro: Depending on your sources somewhere around eight times that of systemic lupus, so a dramatically different size market.

Mark Massaro: We we do believe that the differential broadens.

Mark Massaro: The utility of the differential diagnosis broadens when we added these additional RNA markers and we'll continue to do so throughout the year as we add additional waves to this so.

John Aballi: So we're seeing it firsthand with case studies. We're seeing it in some of the ordering, and that's a part of what's factoring into our sales expansion later this year as well. For each territory, the potential basically has shifted in our minds. And so dramatically different markets.

Mark Massaro: We're seeing it firsthand with case studies, we're seeing in some of the ordering.

Mark Massaro: And Thats, a part of what's factoring into our sales expansion later this year as well for each territory that potential basically has has shifted in our minds.

Mark Massaro: <unk> dramatically different market.

Mark Massaro: Okay, that's great. And then just to clarify, so obviously, a $90 per test and incremental revenue is a big leap. And so I just want to clarify, you know, you came in at $411 for ASPs at Q4 and year-end. Just making sure I'm hearing that you're feeling pretty good about getting the ASP per test to approximately $500 per test at Q1. And then just to clarify, do you think the $500 per test in Q1, if that's true, can serve as a potential launching point for the rest of the year? Very important point, Mark. Thanks for the chance to expand.

Mark Massaro: Okay. That's great and then just to clarify so obviously a $90 per test and incremental revenue is a big leap and so I just wanted to clarify you came in at 411 for Asps.

Mark Massaro: At Q4 and year end.

Mark Massaro: Just making sure I am hearing that youre feeling pretty good about getting the ASP per test to approximately $500 per test in Q1, and then just to clarify do you think the 500 per test in Q1, if that's true.

Mark Massaro: <unk> serve us as a potential launching point for the rest of the year.

Speaker Change: Very important point Mara thanks for the chance to expand so a couple of factors here one we launched the test part way into the quarter. So if you assume.

John Aballi: So a couple factors here. One, we launched the test partway into the quarter. So if you assume an average 500 per test, I think you're going to over... overestimate for Q1, just given the sense that we launched, call it the middle to end of January for the new markers. Additionally, and I just want folks to have clarity here, the trailing 12-month number will go up by roughly a little less than a quarter of that 90 we would anticipate over the coming quarters, and that's just because it's a trailing 12-month number, right? It incorporates data from the last four quarters, and so you're diluting out that 90 if you've only been a quarter in, for example.

Mark Massaro: And average 500 per test I think youre going to over.

Speaker Change: Overestimate for Q1, just given the sense that we launched.

Mark Massaro: Call it the middle to end of January for.

For the for the new markers. Additionally, and I just want folks to have clarity here. The trailing 12 months number will go up by roughly little less than a quarter of that 90, we would anticipate over the coming quarters and that's just because it's a trailing 12 month number right and incorporate data from.

Mark Massaro: At the last four quarters, and so youre diluting out that 90, if you've only been a quarter. In for example, so just just so that folks understand as we report out future numbers some context, there, but basically mark your math is.

John Aballi: So just so that folks understand, as we report out future numbers, some context there. But basically, Mark, your math is pretty good if you can take those two factors into account, and we believe that the incremental add is real $90. Yeah, one other point that Jeff just made important to consider, we do have prior period collections in any given quarter. And so the, you know, the fluctuation, that 411 includes, I think about 2.8 million in collections greater than 12 months from, you know, prior to 24, for example. So that's just something that we've said in the past, very difficult to forecast and can be lumpy.

Mark Massaro: It's pretty good decided if you can take those two factors into account and we believe that the incremental add is real $90.

Mark Massaro: Yes, one other 0.1 other point that Jeff just made important to consider we do a prior period collections in any given quarter and so the.

Mark Massaro: The fluctuation that for 11 includes I think about $2 $8 million in collections greater than 12 months from.

Mark Massaro: Prior to <unk> 24 for example, so that's just something that we've said in the past very difficult to forecast and can be lumpy. So just.

Jeffrey Black: So just those three considerations. And Mark, just to put a finer point on that, just so people understand. Clearly, the company, with John coming in and implementing this revenue cycle reimbursement strategy to expand ASP, has met with great success. We continue to raise the bar on ourselves because as we enhance prior period collections, it increases our organic ASP and therefore our accrual rate. So some of that prior period collection now going forward is already baked into the average ASP. So there could be a bit of a tailwind on the average 12 months just because we're continuing to raise the bar on ourselves with the prior collections.

Those three considerations.

Mark Massaro: Yes, Mark.

Mark Massaro: Yes.

Speaker Change: For the final report on that just so people understand.

Speaker Change: Clearly the company and with John coming in and implementing this revenue cycle reimbursement strategy to expand asps.

Speaker Change: Since met with great success, but.

Speaker Change: We continue to raise the bar on ourselves because as we enhance prior period collections and increases our organic ASP and therefore, our accrual rate. So some of that prior period collection now going forward is already baked into the to the average ASP.

Speaker Change: <unk>.

Speaker Change: There could be a bit of a tailwind on the average.

Speaker Change: Months, just because we are continuing to raise the bar on ourselves with prior collections that makes sense.

Mark Massaro: Does that make sense? Yes, it does. Thanks, guys, for clarifying that.

Speaker Change: Yes, it does.

Mark Massaro: That makes perfect sense.

Speaker Change: Thanks, guys for clarifying that that makes perfect sense.

Mark Massaro: One last question. You know, you guys talked about in 2024, you saw some decline in volume due to attrition from docs who were unable to support or provide additional documentation required to obtain reimbursement. I'm wondering if you think that you could go back to those physicians and walk them through the documentation needed? Because I'm wondering if you think that business could come back or not? And then is there any way that you could frame like what, how much of the volume you think occurred because of that? Yeah, great question. So, maybe some additional information that could be useful, Mark.

Speaker Change: One last.

Speaker Change: Last question.

Speaker Change: You guys talked about in 2024, you saw some decline in volume due to attrition from docs.

Speaker Change: Who are unable to support or provide additional documentation required.

Speaker Change: To obtain reimbursement I'm wondering if you think that.

Speaker Change: You could go back to those physicians.

Speaker Change: Walk them through the documentation needed because im wondering if you think that business could come back or not and then is there any way that you could frame like what how much of the volume you think.

Speaker Change: Occurred because of that.

Speaker Change: Yeah, Great question so.

Speaker Change: <unk>.

Speaker Change: Additional information that could be useful mark if you take a look at the average number of unique ordering providers per quarter. In 2024. It was just under 2500. So 2500 unique ordering physicians ordered the advise CTD platform per quarter on average and 24 in excuse me in 'twenty three.

John Aballi: If you take a look at the average number of unique ordering providers per quarter, in 2024, it was just under 2,500. So, 2,500 unique ordering physicians ordered the advised CTD platform per quarter on average in 24. In, excuse me, in 23. In 24, it's about 2,400. So, we lost about 4.5% of our ordering base year over year. Keep in mind that if you take a look at the expense profile of that, we've gone. from an SG&A standpoint, really reduced. our overall FG&A by about $11 or $12 million during that period as well. So from our standpoint, we're operating more efficiently, we've cut back the sales team by a third when I joined, we're on the cusp of expanding, and if you told me at the start that you'd lose roughly about 4.5% of the physician base, but still be able to grow your top line, I would take that.

Speaker Change: In 24, it's about 2400, so we lost about four 5% of our ordering base year over year Keith.

Speaker Change: Keep in mind that if you take a look at the.

Speaker Change: The expense profile of that we've gone.

Speaker Change: From an SG&A standpoint really reduced.

Speaker Change: Our overall SG&A by about 11 or $12 million during that period as well so from our standpoint.

Speaker Change: We're operating more efficiently with cut back the sales team by a third when I joined we are on the cusp of expanding and if you had told me at the start that you lose roughly about four 5% of the physician base.

Speaker Change: But still be able to grow your top line.

John Aballi: That was really the intention of what we were trying to do. I do think that that business is recoverable, to your point. We need to optimize our processes so that prior auth becomes easier, requesting medical records becomes less frictional. It's just a smooth interaction in that sense. But I knew that if we continued on the path we were on, we absolutely were not going to get paid. And so there is a tradeoff there that has to occur. Our value proposition continues to strengthen with these new markers. And going back to those docs, they've already bought into these and advised at some point in their clinical practice.

Speaker Change: I would take that.

Speaker Change: That was really the intention of what we're trying to do I do think that that business is recoverable to your point, we need to optimize our processes so that prior off.

Speaker Change: Becomes easier requesting medical records becomes less frictional, it's just a smooth interaction in that sense, but I knew that if we continue on the path we were on.

Speaker Change: We absolutely we're not going to get paid and so there is a tradeoff there that has to occur our value proposition continues to strengthen with these new markers and going back to those docs they've already bought into these had advised at some point in their clinical practice and so this is really just smoothing out those interactions over time, that's why we've been heavy.

John Aballi: And so this is really just smoothing out those interactions over time. That's where we've been heavily focused. So we'll continue to do that. But these new markers provide the perfect opportunity to go back.

Speaker Change: Focused.

Speaker Change: So we will continue to do that but these new markets provide the perfect opportunity to go back.

Mark Massaro: All right, I'll keep it there. Thanks, guys. Thanks, Mark.

Speaker Change: Alright ill keep it there thanks guys.

Mark Massaro: Thanks Mark.

Operator: Thank you.

Dan Brennan: The next question is coming from Dan Brennan of TD Cowen. Please go ahead. Great. Thank you. Thanks for the questions. Congrats on the quarter.

Speaker Change: Thank you. The next question is coming from Dan Brennan of TD Cowen. Please go ahead.

Dan Brennan: Great. Thank you. Thanks for the questions. Congrats on the quarter, maybe just starting on pricing can you just remind us.

Dan Brennan: Maybe just starting on pricing, can you just remind us, in terms of your initial feedback from commercial payers, I think the last update you said, what, maybe less than 50 percent of commercial payers, either are getting paid on or in contract. Just give us a sense with the new markers and that $90 lift, how that's kind of flowing through between, you know, your different payer groups. Yeah, good morning, Dan. Thanks for the question. From individual payer perspective, you know, we think about it oftentimes in terms of financial categories. So we lump the blues together. For example, we have some of the large national payers together, government, etc.

Speaker Change: In terms of your initial feedback from commercial payers I think your.

Speaker Change: I think the last update you said what may be less than 50% of commercial payers, either youre getting paid under our <unk> contract just give us a sense with the new markers in that $90 lift how that's kind of flowing through between your different payer groups.

Speaker Change: Yes, good morning, Dan. Thanks for the question from individual payer perspective, when we think about it oftentimes in terms of financial category. So we lumped the blues together for example, we have some of the large national payers together government et cetera.

John Aballi: We're seeing very consistent performance, as we have with some of our other traditional testing. Obviously, with these new markers, we're facing a much lower rate of denial for for experimental investigational reasons, for example. So, you know, there's not a lot of question as to the utility of these markers within this disease context. What we are typically getting denied for, if you will, or where patient responsibility seems to be outsized, is around in-network status, for the most part. And so that's consistent with, again, some of our therapeutic monitoring testing that we offer and some of the financial modeling we did ahead of time.

Speaker Change: We're seeing very consistent performance as we have with some of our other traditional testing obviously with.

Speaker Change: These new markers, we're facing a much lower rate of denial for them.

Speaker Change: For experimental investigational reasons for example, so there's not a lot of question as to the utility of these markers within this disease context.

Speaker Change: What we are typically getting denied for if you will or where patient responsibility seems to be outsized is around in network status for the most part and so thats consistent with again some of our therapeutic monitoring testing that we offer and some of the financial modeling. We did ahead of time, but relative to advise CTD lower rate of overall.

John Aballi: But, you know, we're seeing a lot of denial. Relative to advised CTD, lower rate of overall denials from a coverage standpoint, just your more typical out-of-network type denials, which is not a problem for us. You know, if you think about it, out-of-network really is applicable when you offer something that someone else can do as well. And in both of these settings, we're a sole source provider. So that's the basis for an effective appeal, is that you can't get these markers anywhere else. Again, we'll know over time how effective we are in shifting some of the responsibility back from the patient to the payer, basically being treated as in-network status, given the uniqueness of the markers.

Speaker Change: All denials from a coverage standpoint, just your more typical.

Speaker Change: Out of network type.

Speaker Change: Type denials, which is not a problem for us if you think about it out of network really is applicable when you offer something that someone else can do as well and in both of these settings were sole source provider. So that's the basis for an effective appeal is that you can't get these markers anywhere else.

Speaker Change: Again, we will know over time, how effective we are in shifting some of the responsibility back from the patient to the Payor basically being treated as an in network status given the uniqueness of the markers, but that will take a little bit of time and that will hone our precision on the $90 per day.

John Aballi: But that will take a little bit of time, and that will hone our precision on the $90 we gave.

Dan Brennan: Okay, that sounds good.

Speaker Change: Okay that sounds good and then on the <unk> opportunity just remind us when.

John Aballi: And then on the RA opportunity, just remind us when you've sized or you think about the opportunity for the test now really to penetrate RA, just What's kind of how big is that opportunity? How do we think about just even framing that over the next kind of year or two? Yeah, so advised CTD is useful when you have a suspected connective tissue disease, and that number is not in the literature anywhere that we can find. So we triangulated our internal calculations, taking a look at incidence for each of these diseases, along with the positivity rates we have on our advised tests.

Speaker Change: When you size or you think about the opportunity for the test now really penetrated already.

Speaker Change: Whats kind of how big is that opportunity how do we think about so if you can frame that over the next kind of year or two.

Speaker Change: Yes, so advise CTD is useful when you have a suspected connective tissue disease.

Speaker Change: And that number is not in the literature.

Speaker Change: Anywhere that we can find so we triangulated our internal calculations, taking a look at incidence for each of these diseases along with the positivity rates, we have on our advisor test.

John Aballi: And what we've been able to conclude is now with more confidence that the RE market is truly an opportunity for us with the unique offering. The annual rate of connective tissue disease evaluations is somewhere around 2.5 million. So that would put us, on a conservative side, around 5% penetrated. If you want to create a range here with confidence intervals and whatnot, you can get up to maybe about 10% penetrated. So we just think the value proposition has been enhanced. We always had markers for traditional rheumatoid arthritis evaluation, but now there's a unique reason and opportunity for us to help patients and clinicians in this area.

Speaker Change: And what we've been able to conclude is now with more confidence that the RV market is truly an opportunity for us with a unique offering.

Speaker Change: <unk>.

Speaker Change: The annual rate of connective tissue disease evaluations is somewhere around $2 5 million. So that would put us on a conservative side around 5% penetrated if you want to create a range here with confidence intervals and whatnot you can get up to maybe about 10% penetrated. So we just think the value proposition has been enhanced we always had markers.

Speaker Change: For traditional rheumatoid arthritis evaluation, but now there is a unique reason an opportunity for us to help patients and clinicians in this in this area. So that's really what we're going after somewhere around $2 5 million tests a year is what our current estimate is.

John Aballi: So that's really what we're going after. Somewhere around 2.5 million tests a year is what our current estimate is.

Dan Brennan: And then maybe if I can just go on the volume side, you talked about, you know, really focusing on profitability and all the success you've had with the burn and the pricing, but you also talked in the prepared remarks, you were disappointed with kind of the volume. So for 25, our How do we think about, like, kind of the guardrails, if you will, on your willingness or aggressiveness in going after new doctors, new patients, in terms of also balancing in against getting paid? So, I guess we'll get the update on the volume outlook at Q1, but I'm just wondering, should we expect...

Speaker Change: And then maybe if I can just go on the volume side you talked about.

Speaker Change: Really focusing on profitability and all the success you've had with the burn in the pricing, but you also talked in the prepared remarks, we were disappointed with kind of the volume so for 25 or.

Speaker Change: How do we think about like kind of the guardrails. If you will on your willingness or aggressiveness in going after new doctors to patients in terms of also balancing it against getting paid so I guess, we will get the update on the volume outlook in Q1, but I'm just wondering should we expect.

John Aballi: you know, kind of the number of ordering docs to go up, like, just can you speak through the methodology at which, like, you're seeking to grow volume? Absolutely, Dan. So my comment. a second ago, are really just rooted in the fact that I think it's important to be transparent and honest in performance and objective as much as you can be. And we have high expectations for ourselves in really every area. So, you know, we always think that we can do better. I think, objectively, if you were to look at our performance over the last two years, that would be the one area that you could point to and say, you know, I would like to see this improve.

Speaker Change: Kind of the number of ordering docs to go up like just can you speak through the methodology, which like you're seeking to grow volumes.

Dan Brennan: Absolutely Dan.

Speaker Change: So my comments.

Speaker Change: A second ago are really just rooted in the fact that I think it's important to be transparent and honest in performance and objective as much as you can be and we have high expectations for ourselves and really every area.

Speaker Change: So we always think that we can do better I think objectively. If you were to look at our performance over the last two years that would be the one area that you could point to and say.

Speaker Change: Uh huh.

Speaker Change: I would like to see this improve and thats exactly our mindset internally, we've dramatically enhanced the quality of our team over the last year, we changed our sales leadership and happy to have.

John Aballi: And that's exactly our mindset internally. We've dramatically enhanced the quality of our team over the last year. We've changed our sales leadership and happy to have someone that I've worked with at prior organizations join. We've had a shift in the leadership underneath that person. And the various reps throughout our territories are of very high caliber. Now, over the last 12, 18 months, we've made some changes there. So, we have the right team in place. In terms of the trajectory from a volume growth standpoint, we expect it to improve. You know, if you take a look at when we made these billing changes in the back half of 23, we've been moderately up from where we were at the back half of 23, that run rate.

Speaker Change: Someone that I've worked with a prior organizations joined we've had a shift in the leadership underneath that person in the various reps throughout our territories are of very high caliber now over the last 12 to 18 months. We've made some changes there. So we have the right team in place in terms of the trajectory from a volume growth standpoint, we.

Speaker Change: It to improve if you take a look at when we made these billing changes in the back half of 'twenty three we've been.

Speaker Change: Moderately up from.

Speaker Change: From where we were at the back half of 'twenty three that run rate.

Jeffrey Black: And I expect it to improve. maybe approach the high single digits, you know, from a volume growth standpoint that's based on legacy growth rates. I do expect the volume of physicians to increase. We're doing our first sales expansion since I've been here this year. We'll add a handful of territories. So by all salient sales metrics, I would expect increases over the course of 2025. So number of physicians, orders per physician, and overall volume.

Speaker Change: I expect.

Speaker Change: As to.

Speaker Change: Maybe approached the high single digits.

Speaker Change: From a volume growth standpoint, that's based on legacy growth rates I do expect the volume of physicians to increase we're doing our first sales expansion since I've been here. This year, we'll add a handful of territories. So by all salient sales metrics I would expect increases over the course of 2025, so a number of physicians.

Speaker Change: <unk> orders per physician in overall volume.

Jeffrey Black: And maybe just one for Jeff, just on OPEX leverage, can you just remind us how, you know, implied in the guide, you talked a little bit about gross margins, kind of how do we think about OPEX leverage for the year? Sure. Yeah, Dan, appreciate the question. So, the way to think about this is that, yeah, we will make some moderate incremental investments, particularly on commercial and, you know, continue to invest in the R&D pipeline. But think about the level of revenue growth will outpace the level of OPEX growth. So, we really will start to see some scale throughout 2025, and we'll see that in the margin as well.

Mark Massaro: And maybe just one for Jeff just on Opex leverage can you just remind us.

Mark Massaro: Implied in the guide you talked a little bit about gross margins kind of how do we think about opex leverage for the year.

Mark Massaro: Sure Yes.

Dan Brennan: Dan I appreciate the question. So the way to think about this is that yes, we will we will make some moderate incremental investments, particularly on commercial and continue to invest in the R&D pipeline, but.

Mark Massaro: Think about the.

Mark Massaro: The level of revenue growth will outpace the level of Opex growth. So we really will start to see some scale throughout 2025.

Mark Massaro: And we will see that in the margin as well I think in terms of expectation you really start to see that scale in the second half of the year because we've invested ahead of the curve.

Jeffrey Black: I think in terms of expectation, you really start to see that scale in the second half of the year, because we've invested it ahead of the curve, particularly in laboratory operations, to accommodate the expected increase in demand. So, I think you start to really see that leverage in the last half of the year.

Mark Massaro: Particularly in laboratory operations.

Mark Massaro: To accommodate the expected increase in demand. So I think you start to really see that leverage in the last half of the year.

Dan Brennan: Terrific. Thank you very much. Thanks Dan.

Speaker Change: Terrific. Thank you very much.

Dan Brennan: Thanks, Dan.

Andrew Brackmann: Thank you. The next question is coming from Andrew Brackmann of William Blair. Please go ahead. Hi guys, good morning. Thanks for taking the question. Maybe back to the example that you gave from Florida, you know, it seems like this was sort of an aha moment for that particular physician. So I guess on average, do you sort of have an estimate for how many tests of this new version might need to be ordered to get to that point where they see that benefit and it potentially drives more volume? And I guess related to that, any commercial strategies that you can deploy to maybe get them there a little bit faster?

Speaker Change: Thank you. The next question is coming from Andrew Brackman of William Blair. Please go ahead, hi, guys.

Speaker Change: Good morning, Thanks for taking the questions.

Andrew Brackman: Maybe back to the example that you gave from Florida. It seemed like this was sort of an aha moment for that particular physician. So I guess on average do you sort of have an estimate for how many tests of this new version might need to be ordered to get to that point, where they see that benefit and potentially drive more volume and I guess related to that any commercial strategies that you can deploy it.

Speaker Change: And maybe get them theyre, a little bit faster.

Andrew Brackmann: Thanks.

John Aballi: Hey Andrew, thanks for the question. I think it's a fantastic one and one we're evaluating internally. Although we've probably tested more people with these new biomarkers than had been done previously, I mean, you know, in a given month we're doing 10,000 of these tests plus. So now, a month and a half, two months in, you know, we've tested close. in the several thousand patient range.

Andrew Brackman: Hey, Andrew Thanks for the question I think.

Andrew Brackman: Fantastic one and one we're.

Andrew Brackman: Evaluating internally.

Andrew Brackman: Although we probably tested more people with these new biomarkers than had been done previously I mean in a given month we're doing.

Andrew Brackman: 10000 of these tests plus so.

Andrew Brackman: So now a month and a half two months in we've tested close them.

Andrew Brackman: In the several thousand patient range.

John Aballi: Still a little early to recognize the overall positivity rate, which is I think what you're asking, and it's a good suggestion for our next earnings call to give some of that color, so I'll plan to do so. But fantastic question. I think it also has to do a little bit with how are physicians using the test, and what's their pretest probability that the patient has RA?

Andrew Brackman: Little early to recognize the overall positivity rate, which is I think what you're asking and it's a good suggestion for our next earnings call to give to give some of that color. So all plan to do so.

Andrew Brackman: But fantastic question I think it also has to do a little bit with how are physicians using the test and what's their pretest probability that the patient has.

John Aballi: So it may be a little bit different on a physician-to-physician basis, but we'll have that for you in the future. From the standpoint of how to accelerate this individual experience for the broader physician population, we're turning it into a case study, and this is actually at the recommendation of the physician themselves. So, you know, using, similar to how I described on the call, you know, using a de-identified example but with enough specifics to show that it is true and real, and then to provide this in a few different contexts would, I think, be very useful.

Andrew Brackman: So it may be a little bit different on a physician to physician basis, but.

Andrew Brackman: But we'll have that for you in the future.

Andrew Brackman: From the standpoint of how to accelerate this individual experience for the broader physician population, we're turning it into a case study and this was actually at the recommendation of the physician themselves so using.

Andrew Brackman: Similar to how I described on the call using a D. Identify a example, but with enough specifics to show that it is true and real and then provide this in a few different context would I think be very useful also be nice to have some level of outcome data, which will take some time, but.

Andrew Brackmann: It'd also be nice to have some level of outcome data, which will take some time, but those are things definitely we're looking at doing and partnering with clinicians as they use these novel markers. That's a great suggestion. Okay, I'll be sure to ask it on the next quarter call as well.

Andrew Brackman: Those are things definitely we're looking at doing in partnering with clinicians is.

Andrew Brackman: As they use these novel markers is a great suggestion.

Andrew Brackman: Okay I'll be sure to ask it on the next quarter call as well.

John Aballi: I guess maybe also here, just on the pipeline, any catalysts that we should be sort of thinking about for 2025?

Andrew Brackman: I guess, maybe also here just on the pipeline any catalysts that we should be sort of thinking about for 2025, and then can you just maybe just give us a refresher on on where that stands today. Thanks.

John Aballi: And then can you just maybe just give us a refresher on where that stands today? Thanks. Yeah, so the major catalyst obviously was launched here in January with these new suite of markers. I think that that's very key. We also expect to have sales expansion from a territory standpoint, you know, maybe approaching the low 40s into the mid 40s. We're currently at 40 right now. So up to 10% growth in our territory volume. Those people take some time to get up to speed, but we do anticipate them contributing here in 25. Our pharma business is going strong.

Speaker Change: Yes, so the major catalysts, obviously was launched here in January with these new suite of markers I think that Thats a very key we also expect to have sales expansion from a territory standpoint, maybe approaching the low <unk> into the mid <unk>. We're currently at 40 right now so up to 10% growth in our territory.

Andrew Brackman: Volume.

Andrew Brackman: Those people will take some time to get up to speed, but we do anticipate them contributing here in 'twenty five.

Andrew Brackman: Our pharma business is going strong it's been strong here over the last.

John Aballi: It's been going strong here over the last, call it 12 months, and we expect that to continue this year. And we also have a second wave of RA markers that we anticipate launching by year end, maybe early 26. That should further enhance that value proposition. So I would think that those efforts are going to be the major catalyst that'll be most apparent in the operations of our business. I'll leave it at that. Okay, great. I'll leave it at two. Thanks, guys. Thanks, Andrew. Thank you.

Andrew Brackman: Call. It 12 months and we expect that to continue.

Andrew Brackman: This year and we also have a second wave.

Andrew Brackman: <unk> markers that we anticipate launching by year end maybe early.

Andrew Brackman: 26 that should further enhance that value proposition. So I would think that those efforts are going to be the major catalysts that will be most apparent in the operations of our business.

Andrew Brackman: I'll leave it at that.

Andrew Brackman: Okay, Great I'll leave it up to thanks, guys.

Andrew Brackman: Thanks, Andrew.

Matthew Parisi: The next question is coming from Matthew Parisi of KeyBank. Please go ahead. Hi, yes, this is Matt Parisi on for Paul Knight. I was just wondering if you could provide a little bit more detail on the testing volume. testing volume in general, and if you maybe could give a number of that. Yeah.

Speaker Change: Thank you. The next question is coming from Matthew <unk> of Keybanc. Please go ahead.

Matt: Hi, Yes. This is Matt <unk> on for Paul Knight.

Matt: I was just wondering if you could provide a little bit more detail on the testing volumes.

Matt: Volume in general as you, maybe you could give a number or is that.

Matthew Parisi: Hey, Matthew. Good morning. And I'm assuming you're referring to 2024 testing volume? Yes. No, not a problem. So total test volume for 2024 was 123,000 advised CTD units. That's down 11% relative to 2023. Keep in mind that the first half of 2023 was record volume for the organization in both quarters. So as I said, you know, comparing to the run rate post billing changes, you're up slightly to moderately since those billing changes. Does that answer your question? Yeah, perfectly. Thanks so much. Yeah. Thank you.

Speaker Change: Yeah, Hey, Matthew good morning, and I'm, assuming you're referring to 2020 for testing volume, yes, that's close to no not a problem. So total test volume for 2024 with 123000 advise CTD units.

Speaker Change: Down 11% relative to 2023 keep in mind that the first half of 2023 was record volume for the organization in both quarters. So as I said.

Speaker Change: Comparing to the run rate post billing changes.

Speaker Change: Europe slightly to moderately since those billing changes does that answer your question, yes perfectly. Thanks, so much.

Speaker Change: Yes.

Speaker Change: Oh.

John Aballi: At this point, I would like to turn the floor back over to Mr. Aballi for closing comments. Great, thanks all. As we wrap up discussion of our performance for 2024, our team remains highly motivated and committed to positioning our company for long term success. We are on track to achieve key milestones that will create value, and with this momentum, we're well positioned for an exciting year ahead.

Speaker Change: Thank you at this point I would like to turn the floor back over to Mr. <unk> for closing comments.

Speaker Change: Great. Thanks Al as.

Speaker Change: As we wrap up discussion of our performance for 2024, our team remains highly motivated and committed to positioning our company for long term success.

Speaker Change: We are on track to achieve key milestones that will create value and with this momentum we're well positioned for an exciting year ahead. We appreciated your continued partnership and look forward to providing future updates.

John Aballi: We appreciated your continued partnership and look forward to providing future updates. Thanks.

Operator: Ladies and gentlemen, this concludes today's event. You may disconnect your lines or log off the webcast at this time and enjoy the rest of your day.

Speaker Change: Ladies and gentlemen. This concludes today's event you may disconnect your lines or Lockups. The webcast at this time and enjoy the rest of your day.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.