Cryoport, Inc. (CYRX) Earnings Call Transcript & Summary

Good morning, and welcome to Cryoport's Investor Conference Call. [Operator Instructions] This call is being recorded on Monday, March 31, 2025. I will now turn the call over to your host, Todd Fromer from KCSA Strategic Communications. Please go ahead.

Thank you, operator. Before we begin today, I would like to remind everyone that this conference call contains certain forward-looking statements. All statements that address our operating performance, events or developments that we expect or anticipate occurring in the future are forward-looking statements. These forward-looking statements are based on management's beliefs and assumptions and not on information currently available to our management team. Our management team believes that these forward-looking statements are reasonable as and when made. However, you should not place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. We do not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results, events and developments to differ materially from our historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to, those described in Item 1A, Risk Factors and elsewhere in our annual report on Form 10-K to be filed with the Securities and Exchange Commission and those described from time to time in the other reports which we file with the Securities and Exchange Commission. It is now my pleasure to turn the call over to Mr. Jerrell Shelton, Chief Executive Officer of Cryoport. Jerry, please go ahead.

Thank you, Todd, and good morning, ladies and gentlemen. I have some exciting news to share with you today. Today, we've announced that we have entered into a partnership agreement with the DHL Group, which includes the acquisition of CRYOPDP by DHL. This is a decisive step that pushes our strategy forward as we continue to develop an essential supply chain company supporting the life sciences with a focus on cell and gene therapy industry. These actions expand our capabilities, strengthen our supply chain network, accelerate our growth trajectory and fortify our financial position. This partnership with DHL is a highly strategic in nature and that it unlocks dynamic growth opportunities in the APAC and EMEA regions through -- with one of the most leading logistics companies in the world. CRYOPDP as a part of DHL and with access to the vast resources DHL will provide will help Cryoport to continue to drive its leadership position in the temperature controlled supply chain support for the life sciences with a focus on cell and gene therapy. With this partnership with DHL/CRYOPDP, Cryoport will accelerate its momentum and solidify its market leadership in APAC and EMEA in an industry where we have set the pace for over a decade. In a moment, Tom Heinzen, our VP of Corporate Development and Investor Relations; and Robert Stefanovich, our CFO, will guide you through the details of our new partnership and the strategic vision behind it. What will become clear to you is that Cryoport is a much stronger company with the DHL/CRYOPDP partnership. It reshapes our competitive profile within the industry, and it makes Cryoport an even more attractive global partner to key players in the life sciences and the cell and gene therapy ecosystem. After Tom and Robert have made their presentations, we will open the call for questions, and then I'll provide you some closing remarks. Tom, it's over to you.

Thank you, Jerry, and good morning to those in the U.S., and good afternoon to those in Europe. As Jerry mentioned, this is a very intentional move on our part to pull forward our strategy. But to understand our thinking, we feel that it would be helpful to first look back in time. When we acquired CRYOPDP in 2020, the cell and gene industry and Cryoport were in a very different place. The industry was in a more nascent stage and the pace of commercial approvals was low. Five years ago, Cryoport was supporting only six commercial therapies and had about a 43% market share of the cell and gene clinical trials. The industry was mainly focused on proving the efficacy of these therapies and not yet focused on scaling their usage. Because of that, the large logistics and drug distribution companies were not focusing on the industry and not willing to invest resources or time on supporting it. So we made the bold decision to acquire and build out our own network by acquiring CRYOPDP for a bit under $57 million. CRYOPDP brought to us 220 employees and 22 facilities in 12 countries. Now layer on top of all this, the COVID pandemic. There was clearly a global focus on the vaccines and the distribution of them on a massive basis at the time. Now let's move forward to today. Both Cryoport and the industry have made a lot of progress. Cryoport is now supporting 701 clinical trials, about 70% of the industry trials, and we are now supporting 19 commercial therapies. As you can see by the stats on the slide, the pace of approvals is picking up momentum as is the amount of revenue that the commercial therapies are generating. The good news is that in many ways, this is just a hint of the growth that we expect to take place in the next 5 years. This slide shows the total commercial revenue expected by Wall Street analysts for the 19 approved therapies that we are currently supporting. They project a 6-year CAGR that is over 30%. And as I said earlier, this is just the 19 that we support today. We think there could be at least 5 more approved therapies this year and perhaps 18 BLA and MAA filings. The commercial growth will be partly driven by the shift to treating patients on an outpatient basis. This shift doubles the patient capacity at most points of care, and it is more profitable for the points of care. Last year, 35% of Gilead/Kite's commercial revenue was outpatient related, and Legend/JNJ are predicted that the majority of their patients getting their therapy this year will be in an outpatient setting. If we zoom back out away from Cryoport back to the overall industry, on the right side of this slide, you can see that Deloitte and arm are predicting that by 2030, the industry will have at least 10 blockbuster therapies and more than 30 therapies will surpass $500 million in annual revenue. Beyond the number of therapies, the number of patients being treated is extremely important to us. The chart on the left is a bit busy, but what it is indicating is a shift that is starting to occur, where the approved therapies are starting to address more common disease states instead of the rare or orphan diseases. There are actually a number of drivers for the expected growth over the next 5 years and more. The increase in progression of clinical trials targeting solid tumors. Actually, the first solid tumor therapy was approved last year. The expansion beyond oncology and into autoimmune diseases, the expansion into regional points of care beyond just the large city centers, the continued expansion of the therapies globally, the progress in the therapies moving forward to first or second-line treatments from the fourth or fifth line where they were initially approved and of course, more commercial therapies being approved. So this brings us to our strategic pivot today. We see many key players across the industry, the large integrators, large specialty couriers, large drug distributors, just to name a few. They are seeing what we just laid out in the last few slides. And so they are increasing their focus and committing more resources to this growing cell and gene therapy sector. We have had extensive dialogue with our customers. And as the commercial therapies of today and tomorrow ramp, they will require global scale, global efficiencies and global flexibility beyond what we could accomplish on our own. Therefore, we have made the decision to focus on leveraging the larger global networks of our strategic partners. Our new strategic partnership with DHL Group is extremely important to us. DHL has a 2030 growth strategy, and one of their targets for growth is the life sciences. DHL currently has over 11,000 life sciences and health care certified specialists, 257 good distribution practice qualified warehouses in over 50 countries, and now through their acquisition of CRYOPDP, has the ability to capture more growth through the shipments of the more complex temperature-critical and customized shipments of the biopharma and the cell and gene therapy sector. And of course, Cryoport will help enable that. So to quickly recap our announcement today, it has really four main components: the pull forward of our strategy to leverage our partners' global networks and be carrier neutral; the global strategic partnership with DHL Group; accelerating our growth and strengthening our financial profile by sharpening our focus on our core; and achieving an attractive valuation for CRYOPDP. Now I'll turn the presentation over to our CFO, Robert Stefanovich.

Thank you, Tom. As outlined by Jerry and Tom, you can understand how the strategic partnership with DHL, coupled with the divestiture of CRYOPDP to DHL aligns with our strategy moving forward, focusing on our core and differentiated solutions offerings for the life sciences and for the cell and gene therapy space in particular. In that space, we have established ourselves as the clear market leader. Now we can actually leverage CRYOPDP's offering more effectively in combination with DHL's broad offering, especially in the EMEA and APAC regions. The transaction is an all-cash transaction. The negotiated enterprise value is $195 million, and our proceeds from this transaction will bring the fiscal year-end '24 cash balance on a pro forma basis to over $450 million. You may recall that we purchased CRYOPDP for approximately $57 million in Q4 of 2020. The transaction represents about a [ 2.7% ] multiple of CRYOPDP's fiscal year '24 revenue. This is, of course, a very strong infusion of capital, giving us a number of avenues to build shareholder value in the future. The transaction itself is subject to customary closing conditions and is expected to close in the next 6 to 8 weeks. I'll also note that we filed an 8-K with the SEC, which includes the details of the transaction as well as the press release that we issued earlier today. Tom, you want to move to the next slide on the financial snapshots. Just to highlight a couple of components related to the financial profile of the company moving forward. On the left, you can see the cell and gene therapy revenue for '24 on a pro forma basis as a percentage of total Life Science Services. The pro forma percentage obviously increases significantly to roughly about 84% of our services being tied and leveraged to the growing market of the cell and gene therapy space. From a gross margin perspective, it's also margin accretive in terms of the transaction as the margin increases on a pro forma basis from 44.5% to 46.1%. But more importantly, going forward, as we see the cell and gene therapy market grow further, we also talked in the past about the elasticity of the gross margin, in particular for Cryoport Systems. And then lastly, I just wanted to point out the revenue guidance, obviously, new guidance for 2025 based on the transaction. We expect revenue in total to be between $165 million and $173 million for the fiscal 2025 period. And as I mentioned, lastly, obviously, we have a very, very strong balance sheet moving forward to execute on our core strategy moving forward. So with that, I'll hand back over to Jerry.

Thank you, Tom, Robert. Thank you. Operator, we'll open the floor for questions.

[Operator Instructions] Your first question comes from Puneet Souda with Leerink Partners.

So Jerry and the team, if I could ask what brought about this transaction at this point? I know you went about vertical integration with MVE and CRYOPDP. So wondering if there is a fundamental shift in that strategy, providing a number of solutions across the chain in under one umbrella of Cryoport. And what does this mean for MVE going forward?

Thank you, Puneet. That's a good question, and I'm sure it's on a lot of folks' mind, but there's no change actually in our strategy. This is a refocus of our strategy, and it's in response to the industry. When we bought CRYOPDP, there really wasn't much going on that we could depend on in the last mile delivery and so forth. That's changed. And as Tom mentioned in his comments, with larger companies making more investment, the cell and gene therapy getting a lot more interest and so forth. The companies want to have more say in some of the courier decisions and so forth. And owning a courier had its issues in relationship to what I just said. So as we looked at the current situation and we looked at what -- where we should be moving. And after a lot of conversations with customers, we made this move, and primarily for three or four reasons for maybe five or six reasons, but some of the reasons were this is a global strategic partnership that opens up EMEA and Asia Pac in a way that we have never been able to open EMEA and Asia Pac. We've had some progress in EMEA, some progress in Asia Pac, but this will propel us, this relationship. This is the places where DHL is really strong and where CRYOPDP is really strong. And with the resources behind CRYOPDP of DHL, this is an explosive combination and inures to our benefit. So it will be a win-win-win. Next, it pulls forward our strategy pivot to be carrier neutral, although we'll have preference toward CRYOPDP and so forth, we will be carrier neutral, we will enhance our global network of preferred providers. Thirdly, it sharpens our focus on cell and gene therapy, especially in Asia Pac and EMEA, and it improves our financial profile as well. So we were able to get a very attractive valuation on CRYOPDP. But most importantly, we were able to carve out a strategic partnership with DHL, which is a propellant that we -- is almost more than money could buy. So those are the reasons. That's the reasoning, Puneet. Now as far as MVE is concerned, MVE is vertically integrated within our company. You may know that back in the day when things were tight, we had a real problem on acquiring -- we thought we were dewars and cryogenic freezers. That was an issue. Then we had a chance to carve out MVE from Chart Industries, and we did so. MVE supplies freezers for Cryogene for Cryoport Systems. It supplies dewars for Cryoport Systems. The engineering teams are coordinated. And so it is a strategic asset. It's vertically integrated. The cryogenic systems market will come back. It's in a state of recovery now from COVID reasons that we've talked about in other calls, but it will come back. So MVE is a strong company. It's always been cash flow positive. It's always been profitable even in the worst of times. And we see signs of that industry leveling out now. So we're positive on MVE. But make no mistake about it, this strategic move with DHL and putting CRYOPDP in DHL hands inures to our benefit, it is highly -- this will be an accretive move, and it will help us better serve the industry in a way that we've never been able to serve it in the past. And we have been at this for over a decade. We are the leaders, and this will assure our leadership position as we move forward.

Okay. And then on the -- I didn't see the -- we're at March 31. I didn't see the first quarter results. Apologies if I missed that. And I appreciate you providing the guide. It appears that CRYOPDP is just shy of $80 million in revenue that you are stripping out for the year. Can you just elaborate a bit on overall, the core business itself, what you're seeing in the field today? We saw a departure at FDA, a very strong supporter of cell and gene therapies over late last week. And there are questions as to the strength of this overall sector going forward with such a high-profile departure, someone who was very strongly supportive of cell and gene therapies. Just wanted to get your thoughts on that, too.

Yes. Puneet, we have a high regard for Dr. Marks. He is a professional and he's always -- he's a distinguished scientist and MD, and he's always been supportive of cell and gene therapy. However, cell and gene therapy has always enjoyed bipartisan support. So we're hopeful moving forward that we will continue to have the same kind of support that we've had in the past. We think we will because cell and gene therapy for the benefit of mankind, it's very hard to be divisive on cell and gene therapy. So I think we're okay. We wish Dr. Marks well. He is -- I think he will land on his feet. But given the administration and Dr. Marks' positions, as he stated publicly, the collision happened, and we decided to depart the administration. But we think the administration will continue to support cell and gene therapy, and we think that cell and gene therapy will continue to be supported on a bipartisan basis.

And on the first quarter?

In the first quarter, that's too early to comment. Robert, go ahead and talk.

I don't think we want to specifically talk about first quarter performance until we release our earnings.

Well, the first quarter ends today, by the way.

And so it's really too early for us to comment on this publicly.

Yes.

Yes, maybe just to add to that, to give a little bit color, we -- at year-end, we did provide some color around the expectations, especially for the cell and gene therapy space. And I think that continues to move along. So we talked about BLA, MAA filings, potential approvals. We don't see a slowdown at this point in time.

Your next question comes from Subbu Nambi with Guggenheim.

My first question is you spoke about the gross margin, but could you provide any color on operating margins, please?

I think, maybe just to give a little bit of color. With the divestiture of CRYOPDP, we still expect to drive towards positive EBITDA during 2025. So that has not changed. We do see a lot more leverageability within Cryoport Systems, and we mentioned that in the past as well that that's really where we expect to see margin expansion in the longer term as we see higher utilization of our current facilities and assets as more and more cell and gene therapies come online with commercial therapies or move up into the lines of treatments. And compared to the CRYOPDP business, that was a little bit more restricted in terms of upwards mobility. So the business model itself on a longer-term basis provides for more growth, both from a gross margin and operating margin perspective.

And how much was the CRYOPDP important in winning customer accounts for you guys?

CRYOPDP, the majority of CRYOPDP's business was outside of the cell and gene therapy space. So when we talk about clinical trials supported, the 701 clinical trials that we support as of year-end or the commercial therapies that we're supporting, these are Cryoport Systems clients that we're supporting that in some cases, CRYOPDP would support from a specialty courier perspective, but those are Cryoport Systems end clients. So the clients on the CRYOPDP side are the broader life science, also biologics globally. But again, cell and gene therapy specific is really driven by Cryoport Systems.

That's helpful. And the last one, from DHL, do you now get discounted rates? Or will you get similar pricing?

No, absolutely. So there's a couple of things to highlight there. As Jerry alluded to, the combination of CRYOPDP and DHL gives us actually a greater ability to offer a more competitive and high-quality solution to the cell and gene therapy space and to our client base in the cell and gene therapy space. And that's coupled with discounts that we obviously get and it's coupled with kind of the benefits and synergies of that combined offering from both companies.

Your next question comes from Paul Knight with KeyBanc.

Jerry, with the cash proceeds, what do you see as use of funds? You have apparently, obviously, the $190-or-so million of convert. But what do you plan to do next? Is it working capital? Is it the preferred share paydown? Or is M&A back in picture?

All of the above, Paul. I mean we -- it will certainly strengthen our balance sheet, but -- and so we do have all those options, and we'll continue to look at those options as we move forward. And certainly, we could pay down the debt at any time. If we have a compelling acquisition that comes along, we certainly could entertain that, and we have a stronger balance sheet.

And then as you look at the possible combinations that were out there, I mean, it's obviously DHL, UPS has been making a lot of noise. I don't know the position of Marken and Thermo, but what do you -- what's your evaluation of DHL's position? Are they the best you think for your partnership? I mean, are they biggest? What are your thoughts on DHL?

I think DHL is a very strong company and a very select partner. We do -- certainly, we do a lot of with FedEx in the United States and some in EMEA, but mostly in the United States. We do very little with UPS at this point because they bought Marken -- and so we do very little with that. DHL, if you look at them and you look at their 2030 strategy, their strength, their momentum, the kind of people that they have, the number of health care professionals they have, it is a superlative organization. And it's like a hand in glove when it comes to Cryoport and DHL, especially Cryoport, CRYOPDP and DHL because the initial efforts will go through CRYOPDP with DHL backing. DHL gives CRYOPDP resources that they've never had and would take forever to acquire. So DHL is the ideal partner, and DHL's strength is in EMEA and in Asia Pac. And that's where we have a real need. It's not that they don't have a presence in the United States, but their real strength is in those two regions of the world. So we are absolutely delighted. They have over 10,000 health care professionals. And if you read their 2030 strategy, you can see how we fit in and how this partnership fits in with DHL. So it's -- it has some very, very exciting prospects, and we are just delighted with the leadership and the people that we've interacted with.

And then lastly, Robert, is the revenue for the year, is it either $172 million or $173 million on top end?

$172 million. And maybe just there was a further question earlier just on the revenue for '24 at being around $80 million. Actually, it's lower than that. It's just in the 70s.

Puneet?

Yes, from Puneet. So it's in the 70s, not $80 million -- '24.

Your next question comes from Tejas Savant with Morgan Stanley.

Jerry, a couple of sort of questions for you, which you alluded to in your prior answers. I just wanted to flesh out a little bit. Were you actually running into an issue with new customer wins, particularly in Europe and Asia, given the fact that CRYOPDP was limited in its ability to service those regions? And if so, now that you have the strategic partnership with DHL in place, how much of an unlock could that be? I mean, obviously, it's not going to be something that happens in the next 12 months. But as you look at sort of the next 3 years, can you help us sort of quantify that a little bit or perhaps like set some guardrails around the opportunity that is now in play for you in those markets?

I'm going to make a comment or two, Tejas, and then I'm going to turn it over to Mark Sawicki. But the opportunity is enormous, and I'm going to let Mark talk more about that opportunity. It's truly an opportunity.

Yes. As Jerry had mentioned, the benefit of the DHL infrastructure combined with CRYOPDP is it gives them a tremendous amount of additional flexibility as it relates to logistics solutions and allows them to push a much, much higher volume of material through the "lift," which allows them to be much more competitive on a pricing standpoint. So we've always been heavily engaged in both the European and the Asian markets, and we do hold a fairly large portfolio of clinical and commercial activity in both locations. However, we have had challenges with freight competitiveness, and this will absolutely allow us to accelerate engagement in both regions. And so we're very, very excited about it.

Tejas, just to add in, this is Tom. As we laid out in the slide deck, this isn't just about today. This is about what's coming, what we can see from the commercial ramps that we already have and what we are projecting for what's coming forward.

Got it. That's helpful. And then maybe one for you, Rob. I think in the deck, you talked about sort of CRYOPDP gross margins being under 40%. I remember from back in the day at the time of the transaction, you talked about those margins being in the low 50s or the path to 60%. And is that sort of essentially tying into what Mark just said about access to competitive sort of freight rates and so on? And then as a second part of an earlier question as well, can you talk to sort of the key gaps in the portfolio that you see today in the context of the strategic pivot that we could see you sort of pull the trigger on M&A?

Yes, Tejas, on the last one first, and then we'll talk about margins. We don't have anything on our mind right now in terms of M&A specifically. We do look at a stream of things, and we get a stream of suggestions and activity coming in from investment banker firms and from individual firms and from other advisers. But we don't have anything specifically. And I don't have any gaps to talk about right at this point that we would be pursuing specifically. That's part of the M&A strategy, but I have nothing to disclose at this point or talk about. Now in terms of margins, what -- I think there's some -- Robert can comment further on this if he wishes, but let me just say that I think there's some confusion there because CRYOPDP is in the 40% margin range. And what we have stated in the past is that our margin objective -- our gross margin objective is 55%. It was -- and that our adjusted EBITDA target is 30%. So hopefully, that clarifies it to some degree. But do you have anything else to add to that, Robert?

No. Just maybe to just amplify it a little bit. In our long-term modeling, a few things. One, if you look at the assets in our portfolio going forward, we really have the number one leaders in each of the respective spaces, right? MVE is number one in cryogenic systems. Cryogene within their regional areas, they are clearly the number one. And obviously, Cryoport Systems is the number one in supporting cell and gene therapies. So that gives some pricing power. But more importantly, as the cell and gene therapy advances, we always said Cryoport Systems has a lot more upwards mobility from a gross margin perspective. CRYOPDP is in the more competitive market where because of the services, margins are a little bit more restricted compared to the ability for us to seek margin expansion for Cryoport Systems. And that's obviously leverage to the cell and gene therapy and as that advances. The reason why you don't see us at those 55% gross margin levels yet is because we're obviously building out facilities. We've just launched IntegriCell earlier this year, and that has some impact on the margins temporarily as those businesses start growing. But 55% is certainly -- continues to be our target with some potential for upwards mobility.

Your next question comes from David Larsen with BTIG.

Can you just talk a little bit about the remaining business like MVE, CRYOPDP, Cryogene, Cryoport Systems. For Cryoport Systems and Cryogene, just what is remaining? And will you be able to sell more accounts with this arrangement? Any color there on the lift to revenue?

Yes. David, I wouldn't characterize this with what's remaining. What I emphasized in my opening comments was that this is a strengthening. This makes Cryoport stronger than it's ever been. I mean, certainly, CRYOPDP is in the hands of a partner now as opposed to directly in our hands. But this partnership cannot be underestimated. This partnership is exciting. This partnership strengthens Cryoport. It strengthens its ability to, as Mark just said, to make us more competitive in EMEA and in Asia Pac. And we -- and Robert just went over the number one position we have in the three business units that continue to make up Cryoport. So this is absolutely a strengthening in all stretches of the imagination. And this relationship, by the way, is with Cryoport, Inc. and the DHL Group, the whole group. So we have the leverageability that is -- we have leverageability. It has enormous potential.

And Jerry, can I add a little bit to that just quickly here. So if you think about our business itself, Cryoport Systems, as Robert had mentioned a little while ago, we've been really focused around building out capacity and scalability. And that's largely due to the fact that you're seeing that rapid acceleration in commercial approvals. We had a record number of approvals last year. This year looks to be at parity of last year, maybe even a little bit better. So that acceleration is occurring. So scalability is a significant consideration in every discussion that we have with our client base as it looks -- as they look towards commercialization. And this partnership, the strategic partnership with DHL provides inherent scalability and a lot more flexibility in looking at creative solutions around getting these therapies out on a global basis. So that's going to be a substantial benefit for the markets as well as for ourselves.

[Operator Instructions] Your next question comes from David Saxon with Needham.

Maybe first for Robert, just on the new guidance, $165 million to $172 million, just confirming that excludes first quarter contribution from PDP. And then just on the like underlying assumptions for the kind of base business, like what -- have those assumptions changed at all, specifically wondering around like MVE order expectations? And then I'll have a quick follow-up.

Yes. No, it's a very good point. So it does not include the Q1 CRYOPDP revenue number. So if you look at the overall business and the revenue growth that we expect, it's -- we also talked about Cryoport Systems as really one of the core assets, and that's really where we expect to see the revenue increase substantially. I think for 2025, this transaction itself will have some contribution on margin improvements. I think you'll see a greater impact from the transaction and from the strategy in 2026 moving forward. So I wouldn't say that there's any change in dynamics for '25 compared to when we announced our full year earnings for fiscal 2024.

Okay. Great. And then just on like Bluebird Express, I think that the kind of rationale behind that acquisition was to better align with CRYOPDP. So kind of talk about your view on the Bluebird business. And then kind of along similar train of thought, just the global supply chain centers, like does your view on that -- building out that network change at all now that PDP is like an external partner?

Well, the global supply chain center network is Cryoport Systems. And no, that strategy does not change. And those global supply chain centers that we have built out are in process of ramping up, and they're working very well. Bluebird Express was an acquisition for CRYOPDP to strengthen its rollout in the United States, and it's working quite well and continues to be a part of the CRYOPDP operation, which will be a part of DHL going forward once closing takes place.

Okay. So just to clarify, so the $70 million number for CRYOPDP, that includes Bluebird revenue contribution?

That's correct, yes.

There are no further questions at this time. I will now turn the call over to Jerry for closing remarks.

Well, thank you. Thank you to all of you for joining us today. And I just want to underscore the significance of this moment for Cryoport. It's exciting. The partnership with DHL Group is a catalyst for growth. It pulls us forward strategically, strengthens our financial foundation. It opens new growth frontiers for us. As a result, we're not only poised for accelerated growth, but we are also better equipped to continue to lead in a market that is on a fantastic growth trajectory. We appreciate your continued support and confidence in our vision. Our team is energized by what lies ahead, and we're looking forward to delivering on the promise of this important strategic advancement. Thank you for joining us today.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.