Abbott Laboratories (ABT) Earnings Call Transcript & Summary

Good morning, and thank you for standing by. Welcome to Abbott's Second Quarter 2026 Earnings Conference Call. [Operator Instructions] This call is being recorded by Abbott. With the exception of any participant's questions asked during the question-and-answer session, the entire call, including the question-and-answer session, is material copyrighted by Abbott. It cannot be recorded or rebroadcast without Abbott's expressed written permission. I would now like to introduce Mr. Mike Camilla, Vice President, Investor Relations.

Good morning, and thank you for joining us. With me today are Robert Ford, Chairman and Chief Executive Officer; and Phil Boudreau, Executive Vice President, Finance and Chief Financial Officer. Robert and Phil will provide opening remarks. Following their comments, we'll take your questions. Before we get started, statements made today may be forward-looking for purposes of the Private Securities Litigation Reform Act of 1995, including the expected financial results for 2026. Abbott cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements. Economic, competitive, governmental, technological and other factors that may affect Abbott's operations are discussed in Item 1A, risk factors to our annual report on Form 10-K for the year ended December 31, 2025. Abbott undertakes no obligation to release publicly any revisions to forward-looking statements as a result of subsequent events or developments, except as required by law. On today's conference call, as in the past, non-GAAP financial measures will be used to help investors understand at its ongoing business performance. These non-GAAP financial measures are reconciled with the comparable GAAP financial measures in our earnings news release and regulatory filings from today, which are available on our website at abbott.com. Note that Abbott has not provided the related GAAP financial measures on a forward-looking basis for the non-GAAP financial measures for which it is providing guidance because the company is unable to predict with reasonable certainty and without unreasonable effort, the timing and impact of certain items, which could significantly impact Abbott's results in accordance with GAAP. Unless otherwise noted, our commentary on sales growth refers to comparable sales growth. Our definition of comparable sales growth can be found on Page 2 of our press release issued earlier today and a reconciliation table containing the data needed to calculate comparable sales growth can be found on Pages 16 and 17. With that, I will now turn the call over to Robert.

Okay, Mike. Good morning, everyone, and thank you for joining us. Today, we issued second quarter results that included sales growth of 4.8%, which represents an acceleration compared to the previous 2 quarters and adjusted earnings per share of $1.31, which exceeded the midpoint of our guidance range and the consensus estimate. Considering our second quarter results, and updated outlook for the remainder of the year, we are reaffirming our full year guidance for comparable sales growth of 6.5% to 7.5% and raising our EPS guidance range to $5.45 to $5.60. Before summarizing our second quarter results, I want to highlight a few recent pipeline achievements, including completing patient enrollment in our tectonic coronary IVL pivotal trial, completing our FDA submission for approval of our new Analyte 360 left atrial appendage device; and obtaining C-MarkLibre Duo, the world's first dual glucose ketone monitoring sensor designed to detect rising ketone levels and help prevent diabetic ketoacidosis. We anticipate launching these 3 new products, along with our TactiFlex Duo PFA catheter in the U.S. in a steady cadence over the next 12 months. We also remain on track to begin patient enrollment in the fourth quarter for several important clinical trials that will support a steady cadence of future product launches and these include a balloon expandable TAVR valve, a leadless conduction system pacing device, leveraging our AVEIR pacemaker, a mitral replacement developed following acquisition of Cephea Valve Technologies, a peripheral IVL device developed following the acquisition of CSI and a wearable continuous lactate monitoring center design to reduce the risk of sepsis following discharge from Hospital. I'll now review our second quarter results in more detail before I turn the call over to Phil, and I'll start with Diagnostics. Diagnostic test results inform approximately 70% of all health care decisions, making testing volumes a reliable barometer of overall health care activity and demand. Our test volume data that's sourced directly from our diagnostic instruments located across the United States and around the world continues to reflect strong and stable demand for testing. We view this as a positive indication of the durable underlying demand for health care, not just in the U.S. but globally. This durable demand was evident in our core laboratory results this quarter where our U.S. business grew 7.5% and we continued our track record of strong performance across Latin America. In Rapid and Molecular Diagnostics, sales declined 8%, driven by the anticipated decrease in respiratory virus testing as a result of a weaker than normal season that concluded during the second quarter. In cancer diagnostics, sales growth of 13% was driven by mid-teens growth of Cologuard, which is benefiting from a growing base of both new and repeat Cologuard users as well as contributions to growth from our Precision Oncology and international business. We continue to expect cancer diagnostics growth in the second half to be -- second half of the year to be higher than the first half, supported by increasing volumes from care gap programs, recently launched tests and continued international adoption. In May, the American Cancer Society updated its colorectal cancer screening guidelines, reaffirming Cologuard and Cologuard Plus as preferred screening options. This designation reflects Cologuard's market-leading accuracy and superior ability to detect cancer at earlier stages compared to other available tests. Moving to Nutrition where sales finished slightly ahead of our expectations for the second consecutive quarter. Sales increased sequentially by $125 million, driven by improving performance in both pediatric and adult nutrition. In Pediatric Nutrition, our adult -- in Pediatric Nutrition, our international business was the first of our nutrition businesses to transition back to delivering positive growth, delivering growth of 6.5% in the quarter. In U.S. pediatric, we exited the quarter with the full benefit of recent WIC contract wins reflected in our run rate. And as a result, Abbott is now the market leader in both WIC and non-Wic segments. In Adult Nutrition, we continue to see positive volume trends in response to the price actions implemented late last year. In the U.S., retail consumption of insurers increased double digits compared to consumption levels exiting last year and achieved the highest year-over-year consumption growth in the past 1.5 years. We're also making good progress in our international adult nutrition business where sales continue to grow sequentially and are now approaching levels similar to this time last year. We're also benefiting from sales contributions from new innovation, including new versions of ensure that feature higher protein, lower sugar and refreshed labeling and packaging. So overall, I remain encouraged by the progress we are making and confident in our outlook for the second half of the year. Turning to EPD, where we continue to deliver consistently strong performance. Sales grew 9% in the quarter, reflecting broad-based growth across our largest markets, including India, Latin America and Southeast Asia. This performance reflects the disciplined execution of our teams and the growing demand for health care in emerging markets. This demand is a result of evolving market dynamics, including expanding access to health care, aging populations and a rising need to treat both acute and chronic conditions. These structural tailwinds, combined with our broad portfolio, expanding pipeline of biosimilars and strong brand equity position EPD to sustainably deliver high single-digit sales growth. And I'll wrap up with Medical Devices, where sales grew 8.5%, growth of 8.5% in our cardiovascular device portfolio was led by low-teens growth in electrophysiology and high single-digit growth in Rhythm Management and heart failure. In electrophysiology, the second quarter marked the beginning of an acceleration in our growth trajectory. We launched our next-generation Bolt PFA catheter commonly referred to as Volt 2.0 in the U.S. in May, and we expect to transition from limited market to full market release in the third quarter. Internationally, the expanding rollout of Volt and TactiFlex Duo is gaining strong traction, driving growth of more than 20% in Europe. We remain confident in our outlook for the second half of the year, including our expectation to begin outperforming the market and recapturing share. In Rhythm Management, sales grew 9.5% as we continue to expand the use of AVEIR across both the single and dual chain segments of the pacemaker market and drive broader adoption of this innovative technology internationally. In heart failure, growth of 9% was led by double-digit growth in the U.S., driven by our market-leading portfolio of heart assist devices that address both chronic and acute patient needs. In Diabetes Care, continuous glucose monitoring sales exceeded $2 billion, reflecting growth of 9.5% in the quarter. In May, we secured CE Mark for Libre Duo, the world's first dual glucose ketone wearable sensor. We will begin the international rollout of Libre Duo in the fall, and we look forward to bringing this innovative new technology to the United States market after we obtain FDA approval. So in summary, we remain highly focused on disciplined execution each quarter. Our second quarter results represent an important building block as we move into the second half of the year. We have momentum building across the portfolio and clear line of sight to the key drivers of sales growth acceleration that are forecasted in the second half. Our continued focus on gross margin expansion gives us confidence in raising our full year EPS guidance. And we have several new products that we anticipate launching at a steady cadence over the next 12 months. And now I'll turn over the call to Phil.

Thanks, Robert. As Mike mentioned earlier, please note that all references to sales growth rates, unless otherwise noted, are on a comparable basis. Turning to our second quarter results. Sales increased 4.8% on a comparable basis and adjusted earnings per share of $1.31 exceeded the midpoint of our guidance range and the consensus estimate. Foreign exchange had a favorable year-over-year impact of 0.8% on second quarter sales. which was a slight improvement compared to our expectations at the time of our earnings call in April. Regarding other aspects of the P&L, the adjusted gross margin profile was 58.0% of sales representing an increase of 100 basis points compared to the prior year. The improvement was broad-based, reflecting favorable business mix within the legacy Abbott portfolio and from the addition of Exact Sciences as well as the continued operational improvements and disciplined execution of our margin expansion initiatives. Adjusted R&D was 6.9% of sales and adjusted SG&A was 28.6% of sales. Based on current rates, we expect exchange to have a positive impact of approximately 1% on full year sales, which includes our expectation for exchange to have a negative impact approximately 1% on third quarter sales. For the third quarter, we forecast adjusted earnings per share of $1.38 to $1.46. With that, we'll now open the call for questions.

[Operator Instructions] And our first question comes from Robert Marcus from JPMorgan.

Great. Robert, if I may, two. One, a market question, one in Avid question. And if I start with the market question, I think a theme that a lot of investors are focused on, given some of the negative pre-announcements out of the hospital sector is the potential for decelerating procedure volumes particularly in the U.S. We heard from J&J yesterday that they're not seeing any signs to that. We heard from you this morning particularly on the diagnostic volumes where you have a great view into forward-looking volumes it sounds like you're not seeing anything. So I'd love to hear your view on the health and the forecast of procedure volumes in the U.S. and what you're seeing and expecting.

Sure. Yes, I mean, that seems to be a topic of concern for investors. I think it's less of a concern for -- it's less of a concern for the companies, I think at least the companies that are in the markets that we're operating. And I think there's a couple of reasons for that. I mean I think some of the concern for the decline in volumes is tied to kind of challenges with the ACA, lower enrollment rates or dis-enrollment rates in Medicaid. And I think that's that's a flawed assumption, Robbie, as it relates to the med tech and diagnostic space. If you go back to when the ACA was implemented, really the pharma companies that predominantly benefited from new patients coming into the market. We didn't see that in med tech or in diagnostics. We didn't see a spike in demand when the AC and the expansion of Medicaid happens. So I think it's logical here to assume that if we didn't see the benefit, I don't think we're going to see the downside if that truly is what's happening. And I think one reason for that is that it's not Medicaid that is a driver of medtech surgical procedures in the United States. It's actually Medicare. Medicare is by far the largest U.S. payers as it relates to as it relates to devices. For us, it's over 2/3s of our U.S. cardio business. So I think that's one reason. The other reason that believe it's not a concern, at least right now, not seeing it, is that not all health care products are the same here, right? So demand for demand for like, say, like high acuity life-saving products is very inelastic. In the U.S., we treat people with serious acute medical conditions and the system doesn't -- system doesn't save lives of only those people with insurance, right? And that's why we didn't see the impact of expansion of ACA and Medicaid into the business because those patients were already being treated. And then if you look at our portfolio, it's really tied and maybe this is a little bit more of an Abbott side. We're really tied to a lot of major chronic conditions like diabetes, cardiovascular, cancer, and this is less likely to forgo insurance. So I think that's 1 reason. I think the other reason is our data is not showing that, Robbie. And I'm not referring just to our weekly sales and things like that. It's just looking ahead. I think 1 of the benefits of our diverse model here is that it really provides a pretty holistic view of the entire health care system, not just in the U.S. but globally. And I think as you mentioned -- my prepared remarks, we look at our diagnostic business is not obviously a great business to be in, but it also provides us, I think, forward-looking into the health care environment in the health care system. And our instruments are located across the world, across the country, all in the states here in the U.S. and testing volumes in the U.S. have held up very well, not seeing a decline including in the state that we've seen the highest level of ACA dis-enrollment. So we've gone as deep as looking at it from that perspective. Our U.S. core lab business has accelerated growth in the last 2 quarters. Our print here is about 7.5% this quarter. But if you unpack that, we've got a couple of different segments in our U.S. core lab business, Robbie, labs and then specifically hospital labs. So these are our business of selling instruments and reagents, specifically for hospital and in-hospital testing. That business was up 13% in this quarter. So I think if I look at the diagnostic system as a forward-looking barometer there. We're not seeing that. We're seeing strong demand for our U.S. cardio business. I'd argue that our U.S. cardio business is performing better than it's ever been. And we're seeing that same similar strong stable demand internationally, both in developed and emerging markets. So I feel very good about overall health care markets and especially our markets. I think -- I think I said this publicly about 1 month, 1.5 months ago, I continue to believe that health care demand is just going to continue to accelerate as we see this aging population dynamic, I think every day in the United States, you have 10,000 people that turned 65 and age is a driving factor of health care. So I think this aging population is a global dynamic. And I think the demand is -- right now, we don't see it as a concern.

Well, that's great to hear it. Maybe just a quick follow-up. One, Abbott-specific. It was good to see a small beat on organic sales in second quarter. The forecast includes an acceleration in third and fourth quarter. I would love to hear how you're feeling about the confidence level and that acceleration in the second half? And if you don't mind just highlighting some of the key growth drivers that get you there.

Sure. Well, I'm feeling very confident, as I've said, but that feeling of confidence is really driven by a lot of hard work that the team is doing. I think Q2 results showed that we've got momentum that's building. Our growth rate stepped up to mid-single digits from where it was in the last 2 quarters of low single digits. Sales dollars, sales growth rate, all of that accelerated each month during the quarter. So as you look to the second half, you've got a lot of businesses, I'm sure we're going to touch on a lot of them here, but a lot of the businesses that are doing strong growth rates, and we forecast and continue to do those strong growth rates. But the lift in the second half, 80% of that lift, going to call a trajectory shift is really coming from 4 areas: nutrition, electrophysiology, Core Lab and cancer diagnostics. And each of these 4 businesses are entering with a lot of momentum and line [indiscernible] -- line of sight to the drivers of the business. And I'm sure we'll touch -- double click on and all of them during the call here. But listen, nutrition is tracking slightly ahead of expectations. Several of our strategies, whether it's pricing, new product launches, commercial execution, that's all being done very well by the team. In EP, we've got a lot of great launch activity, a lot of good feedback on our new products. So I expect the second half of the market to really show that growth acceleration that we've been forecasting. In our core lab business, listen, our businesses have performed very well across the world. We obviously had the challenge of the VBP in China, where we had a pretty sizable portion of our international business declined for at least 5 quarters, around 30%. We're still forecasting a decline in the China business, but much, much lower mid-single digits. So that allows some of the other businesses that have continued to do very well and actually accelerate to kind of overpower that China impact. And then cancer diagnostics, very good trajectory there, especially with new Colguard users. They're exceeding our expectations. And I've learned a lot about these care gap programs. I got confidence in them. We've got a lot of work around them. And so I'm confident in that. So it's really those 4 businesses that represent significant ship. Obviously, all the other businesses have got to continue to do well, and they've got all their strategies. But if I were to kind of really focus on what's going to drive that second half, it's these 4 areas here. And they're actually going into Q3 with a lot of good momentum, some of them are a little bit ahead of what we thought we would be at. So we feel good about that second quarter acceleration.

Our next question comes from Larry Biegelsen from Wells Fargo.

So Robert, I'd love to double-click on Libre. If you could talk about the Libre trends in the U.S. and international. I think you only reported worldwide growth of 9.5%. What's the outlook for the CGM business, the remainder of this year? And what's your latest thinking on the U.S. timing for the dual ketone glucose sensor and type non-insulin coverage? And just lastly, can these accelerate your CGM growth or just maintain the current rate?

Sure, Larry. I love your characterization of only 9.5% on a $2 billion quarterly business. But I get where you're coming from because we've had higher growth rates. So I get that. I understand that. Let me see if I can unpack this a little bit, so we can kind of all get centered around this very important market of ours and how we see it. I'll get to all your questions, but let me just kind of talk about this, and I've said this a couple of times on other earnings calls. We remain very bullish about this market, Larry. As I've said in the past, you've got 75 to -- you've got 75 million to 80 million people around the world that could realistically be on a CGM and you've only got 15 million so far. So there's still plenty of opportunity for growth and growth and growth acceleration. And I think it's very sustainable. There's a lot of building blocks to be able to unlock that opportunity. I'd say the #1 or the one that we've seen that has the most immediate impact and pretty significant to unlocking these opportunities is really reimbursement expansion. And we have a lot of reimbursement expansion opportunities in the funnel. We're in active discussions with a dozen or so countries that are either looking to introduce or to expand reimbursement. And the reason they're having -- we're having these discussions to expand or introduce these categories or expand the category is because of the robust clinical data that's been developed over a decade with this technology that supports widespread adoption. We've generated data that shows that our competitor has invested and generated data that supports that. And the data is pretty resounding. It lowers A1cs. It reduces hospitalizations. People spend more hours per day in a normal glycemic range and that has measurable outcome discussions to the health care system. The challenge, Larry, is is actually trying to pinpoint the exact month or quarter as to when that reimbursement expansion is going to happen. Like you mentioned in the U.S., and we're going to be talking about that, but it's difficult to forecast that. I would actually say it's easier to forecast the conversion of an existing eligible reimbursed patient population, the penetration of the technology and how that runs than it is to try and pinpoint when these reimbursement expansions happen. And I think when you go through a period of time like that, without a major reimbursement expansion. You see this kind of market growth plateau. And when I say plateau, I'm referring to like 8%, 9% growth, which like I said, I don't think is a bad -- is not a bad growth rate. It's just not as high as what we've seen before. And to your point on does it -- do these things keep you at this growth rate? Or does it accelerate? It drastically accelerates it, right? Like any one of these markets that goes to reimburse an expansion or introduction of reimbursement it dramatically accelerates the growth rate as we've seen in the past, Larry, and you've a company this segment, that has significant impact. The challenge is not if these countries adopt it. The question is when and how to forecast it. And it's difficult for me to -- with a business of this size to try and pinpoint the exact reimbursement. But I can tell you, we are very active and active discussions with very large markets to expand or introduce reimbursement. If I look ahead of some of the key reimbursement expansions that are coming, obviously, the U.S. type 2 is a huge opportunity. It's going to unlock around 10 million Medicare beneficiaries. It's going to accelerate commercial insurance coverage. This could be a multibillion-dollar opportunity and it could happen in the fall. I just can't forecast it exactly -- when exactly it's going to happen. But when it does happen, it is going to definitely accelerate our sales, and we're planning and positioning ourselves to be in the best possible position as it relates to sales force distribution, et cetera, to be able to capitalize on that opportunity. The international basal coverage expansion, I mean, right now, with all the work that we've done, I'd say you've got France, you've got Japan, you've got Canada that have broadly adopted this. Those are 3 markets that are in the top 10 international markets. There are another 7 markets here that are pretty significant [ mover ] some larger than these markets that we'll have -- that we're having discussions. And given the clinical data, given the pressure from the societies and the patient populations, those are going to happen also. I just can't call it to the exact quarter. So these reimbursement opportunities, they're going to accelerate it. And until that happens, I guess I'd say, yes, you're at this like 8%, 9% growth rate, which on a $2 billion or approaching $10 billion business, that's not a bad business to be in. And I would say -- and I would say we feel so strongly about the -- about this market and the ability for this market to accelerate and continue to grow and the potential that exists that we're probably in the final stages here of planning for a fifth manufacturing facility. We got our facility up, our last facility, our fourth facility. We got up and running probably in the 2024 time frame, given the trajectory that I'm seeing right now, that's a $100 million sensor facility. We're probably going to be bumping up against capacity at that facility probably in the next couple of years. So we're already looking at our fifth facility. It will probably be a $1 billion investment that we're -- right now, we're looking at where we're going to make that investment, whether it's going to be in the United States, internationally, if it's going to be in the United States, what state we're going to do. So we feel good about this market, Larry and we've got plenty of growth drivers here. I just go back to -- you've got 80 million people that can use this product and clinical data suggests that they should be using the product and the health care systems will benefit when they do use the product. And currently, we're at 15 million. So I feel very good about -- I feel very good about our business and about our position. Regarding -- I think you had a question about -- well, you had a question about timing of CMS expansion. I think I answered that. And then timing on DGK in the U.S. I'm not going to try and forecast that one either. But what I will say is that the discussions are in, I would call very, very advanced kind of final stages, and I'm not going to try and forecast that. As soon as we have it approved, we'll issue a press release and we'll go and start preparing the market. But we are hearing great things from -- already from some of the -- from some of the European physicians that have had some early access to the product. So we feel good about that. And we got a lot of product innovation coming too, Larry. I mean I know there's a lot of focus here on DGK. We probably had 2 more programs that I'm not going to talk about for competitive reasons here, but that's going to be another another driver of growth for us, too. So again, I feel good about this market. We're making the investments. We believe in the growth trajection, the potential that exists in it, and we're full speed in execution.

Robert, thanks for the comprehensive answer. Just to set the record straight. I would say you only reported worldwide growth. I wasn't criticizing the 9.5%, but I just wanted to be clear about that.

You can criticize, Larry. That's fine. We are -- this is a good business, and it's doing very well. I know it gets a lot of attention for -- because of us and the competitor. But it's a good business. There's a lot of opportunity here. I'm just trying to provide context of the opportunities and how this will accelerate given reimbursement expansions.

Our next question will come from Vijay Kumar from Evercore ISI.

I want to dive a little bit on Exact Sciences. Business did, to your point, slightly north of 13%. I think I think you're assuming a step-up in back half, maybe 16%, 16% plus. And a lot of that is driven -- maybe some of that is pricing, some of it is care gap. So my question is, how much visibility do you have on these care gap programs in the back half stepping up for Exact Sciences. And I think a related question was [indiscernible] just present at the redo data advanced adenoma detection rate was north of 18%. I think that's well above your competition. So when you think about the blood side of CRC screening, do you still expect Abbott to be the market leader on the blood side even though your entry into the market will be slightly behind Garden.

Sure. Yes, we grew 13% in the first half. Our deal model that we put together to support the acquisition for 2026 at mid-teens, I feel confident that we'll achieve that. The model called for second half being higher than first half. The integration is going very good, very well. We're not seeing any kind of issues or disruption. I'm just very impressed by the team there and their understanding of the market and they've done a good job here at making sure that I understand all the different detailed kind of elements of how this market works and drives. To your point of the care gap, car volumes ramp in the second half. And that's what's going to help drive. It's not just that, but it's a contributing factor to the acceleration in the second half. KGAAP programs really are they help the health systems achieve their HEDIS credit, their CMR Star ratings. And that focus from the health care systems for some reason, tends to happen in the second half. So they're looking at their scores, they're looking at their ratings and they're looking at ways at how they can ensure that they're achieving their targets. That seems to happen a lot in the second half. Do we have visibility? Yes, we absolutely have visibility. We have -- the team is an incredible team there in terms of their market access team. They've got work to do. There's no doubt, but there's a lot of visibility to those programs, and there's a lot of conversations that are happening with the health systems. They're seeing a need to continue to push on earlier detection of Cologuard. So I feel good about the ramp-up of the care graph and the visibility to that. You mentioned price being an element there. So as we transition from Cologuard to Cologuard Plus. That's a little bit of a tailwind also. But I think there are a lot of key growth drivers here in the medium and long term, Vijay, and they're all looking very good. If you look at the growth from Cologuard users, they're exceeding our expectations. So there's a certain forecast of how many new users we will be able to bring in and the team are actually exceeding that target. The number of repeat users in Cologuard, we talked about the rescreen. That funnel is expanding and it is extremely reliable in terms of -- since we have the names, people want to stay up to up to date with their screening. So that rescreen funnel is expanding, and that's a great opportunity for us. Obviously, Cancerguard, we're investing in that launch. We're going to be reviewing some of our next MRD next-generation MRD data will be coming out also. There's international expansion. I've been involved in some of the discussions around that, and we're going to be making some pretty interesting progress there with certain governments. And then to your point, the ability to add a blood test to the portfolio is going to be, I think, extremely attractive for us. Now as you know, blood tests, they're obviously very -- a little bit more convenient. I think Cologuard is pretty convenient, but I would say blood is a little bit more convenient than that. But it has a problem, which is it doesn't have the same sensitivity as it relates to detection of precancerous polyps and an earlier-stage detection, right? And when you think about screening, that's super important. So I think we'll be the only company to say, will you be a leader in blood? I don't actually see it like that, Vijay. We want to continue to be the leader as it relates to screening and now you're going to have a company that's going to have the opportunity to not only offer best-in-class stool test, but now we'll also have best-in-class blood test. And I think there might be opportunities. I think as you saw some of the guidelines come up from the American Cancer Society, there is a preference and a drive towards Cologuard, but if you've got -- you still have a lot of patients that aren't up to date with their screening or haven't done screening, whether it's colonoscope or Cologuard, and that will be an opportunity for us. So that will be a new market. And I think the way I view it is, okay, we'll bring these patients into these consumers into our screening funnel, and then we'll be able to educate them on the benefits of Cologuard. So I think we'll be in a great position as it relates to being the only company to have both stool and blood and be able to kind of support the health systems with that, even with that precancerous detection being lower than Cologuard doing a blood test, if you're not doing anything, it's is probably a good first step, but then you want to actually start to do it with a Cologuard test. So again, I see a lot of great opportunity in our cancer diagnostic business. The integration is going very well. I continue to be very impressed with this team and their understanding of the market that they've built and their plans to continue to drive it.

Our next question will come from Matthew Taylor from Jefferies.