GE HealthCare Technologies Inc. (GEHC) Earnings Call Transcript & Summary

Hello, everyone. Thank you so much for joining. It's Patrick Andrew, U.S. Medtech Team. Firstly, disclaimers. So morganstanley.com/research research disclosures, which is a great website. I recommend you all go there for fun. But much more excited to have GE today. We've got Peter, CEO; and Carolynne, who's the Head of Strategy side of things. And great to have you guys here.

Great to be here.

I appreciate you coming to the conference. There's a lot going on in radiology. I think we could start kind of almost anywhere, but I don't know, it's quite topical at the moment we were just chatting about it. Maybe we can start within core imaging business and some of the fastest-growing areas cardiac CT. Then CT is a great market for you guys globally. Would love to get a sense how things are going, how cardiac has sort of grown in the U.S. and elsewhere and just in general for CT.

Yes. I mean, look, first of all, again, thanks for having us. It's been a robust procedures market really around the world, which I think is one of the interesting things to your point about it's being good to be in radiology or even cardiology broadly, aging population and also just the amount of devices from our cousins, so to speak, in the device world that are fundamentally tied to an imaging procedure. So as many of the imaging companies, we've all benefited from it. To your point about what's really doing well. I think CT obviously, is booming across the board. In many ways, it's kind of the Swiss Army knife of diagnosis. Even the labor shortages that are out there, move to drive a market like that because in 2 minutes, you can understand what the issue is with someone as opposed to 3 or 4 visits. And as much as that kind of methodology in the past where you'd see a primary care and then we see specialist before you got imaging, it's happening a lot earlier. And to your point on cardiac CT, it's happening even more. And I've been involved in CT for many years, but way back when, when the first scanners could do kind of the triple rule out of a pulmonary emboli or aortic dissection or a coronary blockage, it's evolved so much more. And this idea of doing virtual FFR being able to make a decision relative before you intervene, obviously, all the early screening, we're seeing definitely strong growth in that area. And I think Photon Counting is only going to continue to help drive that to the next level. We don't have ours out, but stay tuned for more news here in the near future. I'd say we're on track to all the dates we spoke of. But that's super exciting. And then the other area, Patrick, is in Nuclear Medicine, which has been a little bit of a sleepy area for many years. There hasn't been a lot going on. And now that's just exploding. And it's exploding because of new agents, both therapeutic as well as diagnostic driving that space, in particular, PET, so we're seeing lots of growth in there, and I'm sure we'll come back to talk more about that. And then MR. I think MR is just one of those great modalities that's continuing. It's always been this gold standard in contrast and capabilities for soft tissue. But now it's also doing so much more even with resolution, no radiation. So obviously, all comers can utilize the technology. But we just see robust markets, and again, driven by aging population, procedures that are needed to assist in actually delivery of devices. And then this idea of when it's tight for labor, do you want someone having 4 visits when you don't have enough people, or do you want to go definitively to diagnosis early. And we're seeing more of that happening, in really health care systems around the world.

It's -- you mentioned MR. Actually, we chat before this about a really interesting company in Cytek that have a great platform. But one of the things that hold them and many other companies back is that just scanner time access, speaking neurologists and basically, it's just time on the MR. Particularly in the U.S., I guess, globally, how tight is -- I mean, it feels like the installed base is quite heavily utilized. Are we at a point where we need to see a little bit of acceleration of that replacement cycle to broaden out the installed base? It feels like block time is pretty limited.

Yes. It's an interesting phenomenon. Around the world, you just have wait times that are significantly longer than they were pre-COVID. So there's lots of theories on why that is. I think they come back to the points that I just previously made. But particularly in MR, where the historical slots were a 1-hour slide, maybe 45 minutes. We've advanced the space. Others have as well, but we kind of led with this Air Recon DL which, again, is using deep learning to kind of fundamentally change how an MR produces an image. The result is better image quality, but the bigger result for productivity is, you can do a 20-minute exam on most capabilities. And so having -- helping providers get their slots down so that they can fundamentally double their capabilities is a big part of it. But the fleet in the United States for most imaging equipment, most, is 8 to 10 years. If you look around the world, it's probably 6 to 7. And some of that was during COVID, nobody wanted you in their hospital doing a big installation, right? It just didn't happen. So you have that build up and then the growth of ambulatory surgical and outpatient centers that are doing more sophisticated procedures, hips, knees, cardio procedures, all of those need that additional equipment. So it's one of the reasons when we see tight capital questions coming up and say, "Gee, I may have to make a decision on my capital, where do we usually end up on the scale." Sometimes something like monitoring might be a second or third priority, but you typically always see the big imaging as a first priority because it is a core generator of revenue, and it's an enabler of productivity.

And PET is another area where we would expect to see capacity constraints over time, especially as more of these molecules are being adopted for drug therapy and diagnosis.

Yes. And to that point, this -- what's happening with Flyrcado, our newest agent in the diagnostic space for myocardial perfusion is pretty exciting. I think there's going to be -- that's going to be a game changer from the standpoint of what you can do with perfusion. And we talked about cardiac CT. There's different tools, obviously, for coronary assessment. But for perfusion of the heart muscle and ischemic disease, it's -- this is really going to change the gold standard from what's been done in SPECT for years. So lots happening there. And ultimately, that's going to drive cardiac practices to want to have their own dedicated systems.

es, it's a good point on the patent SPECT side of things. Why do we use Flyrcado given it's come up. A lot of success, good partnerships now. Maybe to level set the room for people who might be less familiar around Rubidium and what Flyrcado brings to the table and the half-life benefits from that side, just to paint the picture so people can understand within perfusion, the opportunity set for Flyrcado.

Yes. So even just bigger picture, right, forever a SPECT camera, which is a basic 2-head nuclear med camera, you might go in, you get a study at rest, you have a study at stress. It could be 2, 3 hours, you're laying there on the table to get the study after you've gone through that. And that study would tell you if you have certain parts of your heart are not actually getting proper perfusion, right? So PET comes along in the space. And the only agent fundamentally was ammonia or rubidium, which has a half-life of about 90 seconds in that window, which means you have to make it right there next to the bed because it's gone in 90 seconds, it drops off. And so there's -- organizations have done quite well with rubidium, with the generator, but there's costs and limitations of what that means to move into the SPECT world. And SPECT has, I think, 5,000, 6,000 some procedures that are done in that area. And if you look at the PET version of it, it's still a very small percentage of it. And the question is, well, why? Well, with a product like Flyrcado that's come out, it does a couple of things. One is you can take that 20, 30 or 2-, 3-hour study and just like with rubidium, take that down to, say, 20 to 30 minutes, but not have to have a generator. You can actually have a drug shipped to your department on demand. The resolution of these is significantly better, meaning you have false positives and sensitivity specificity that is significantly better than what's out there in the marketplace. And then the other area is radiation dose. It's a lower dose to the patient and also works better on larger patients. And obviously, we have a challenge from 20 years ago to have larger patients. So it really kind of brings all of that together. So there's a lot of excitement about bringing that into the portfolio. On top of the hope of more molecules coming in the pipeline that might be in oncology and other areas. So the dialogue at the top of the house in a health system is we need to really think about our PET strategy relative to how it plays out for diagnosis, but also then how it supplements therapeutic delivery.

Within PDx in general, there's obviously been a big fee change into how it's reimbursed being expanded, not really a cost line anymore. Now it's actually getting paid for, I would argue, properly. What are you seeing in terms of that? How are the customers responding? It takes a bit of time for people to get familiar with the fact that there's been changes. But what have been the changes on the customer level?

Yes. So it's -- to your point, Patrick, it's slow to kind of all these reimbursement things typically don't happen overnight, but it's a huge deal. So a PET study that you got $200 for FDG because it was like a supply forever. Now a product that costs $4,500, you get reimbursed at $4,500 and you get the reimbursement for the scan separately. All of a sudden, the study in the old reimbursement -- and again, this is the United States model with CMS. It wouldn't be economical to do so. Now not only is it economical, it actually makes sense that in the spectrum of how you set this up, that it can be an area that you can drive a reasonable profit. So we ultimately think this is going to really be important. It's a key part of how we speak with customers to help educate them, obviously, about the drug, about how you think about payment structures, how you think about process. And that becomes a really important part of this because unlike a drug that comes into a vial and you can stock it, this is made every day for you, for that patient. And if it's not used, it has a half-life, it means it expires. And so how you set that up in a proprietary way that works for a customer becomes very important for them, but it also creates a really interesting stickiness to a company like GE Healthcare that this may not be the only molecule you buy from it, you might buy many. And so again, we think this is a really nice franchise that we're going to obviously continue to grow.

It's one of the things I never really got about, Peter, like what happens when the patient doesn't turn up? If the half-life is there and expires, is that like built into your pricing agreements with the customers? Or is it just kind of they just eat it? Like how does that work?

It varies by customer. But as you ramp up, I mean, let's just start how this is. When you go, you're making these in CMOs geographically, and let's just say there might be 40 doses in a given cyclotron batch and you only have 5 patients that day, right, 35 get thrown out, and that just hits your gross margin. So the more that actually those are consumed and as you start out any new molecule, the margins are going to be lower and they're going to rise. For the customer, when they start out and they only have a couple of patients, typically, it is a loss. As you have a larger patient pool, you obviously can substitute doses around and manage within your own departments. And so part of that would be we would work with them on services if they've had a big fallout rate, how do you -- what do you need to do process-wise? And like other visits, this is one you want to make sure people don't miss. So there's a lot of techniques to make sure that they don't do that. But again, partnering with someone who can help you administer process change, not just sell you a product, we believe in this space is a big differentiator.

We were doing a dog call the other day, and I was a little surprised because I have deep in-built cynicism on Alzheimer's. I was there originally Biogen and Life Healthcare, I'm sure of doing that whole thing. But they were specifically calling out the big increase in Vizamyl demand. So I'd just like -- I'd be curious to see how you guys are seeing demand on that side. And maybe for the audience who's less familiar kind of flag Vizamyl, the opportunity there?

Yes. So again, back to PET imaging, but now moving from the heart to the brain for Alzheimer's. And as we all know, amolide beta plaque is one of the indicators that can be a leading cause play into the Alzheimer's space, not fully definitive, but highly suspect. And so a product that we make called Vizamyl actually lights up the amount of amolide beta in the brain to the level that you can quantify and understand what that is. You need to be able to have that type of diagnosis to be able to then go on one of the actual therapies that Patrick had actually mentioned. And then after each of the administrations thereof, the drug, you need to actually do an MRI follow-up because one of the side effects potentially from the therapies is potentially swelling potentially some micro bleeds. And so you can see how then imaging for diagnosis to see what you need therapy and follow-up every injection afterwards, you need to actually do a follow-up MRI. And so the diagnostic part of this becomes very, very important. And again, as much as saying side effect potential for microbleeds and swellings seems rather challenging. We all know when there is no really other alternative for Alzheimer's at this point in time, it becomes a real viable risk to take. So we are seeing good uptake in that space. I think the opportunity for tools added into the portfolio as well to help the clinicians manage those patients, the changes in those patients, all of that is a big part of it.

Carolynne, I don't know if you'd agree with this, but I feel like in all the meetings that I have on GE, the one division that literally never comes up is patient monitoring. But you made a big hire with Jeannette, that surprised a lot of people, very well regarded as a hire. And then you also have some interesting ventures stakes in companies like LifeCore and things like that. So it clearly matters to you guys in a way that sometimes maybe the market isn't asking about as much. So I guess, are you surprised you didn't get asked about it? How do you feel about, obviously, Jeannette joining? And what should we be thinking of when we think of patient monitoring?

Yes. So Jeannette Bankes, who joined us from Alcon previously 15 years with Boston Scientific, a lot of different things that she's done. One is a super good operator and someone who also has a pretty good digital background. If you look at that business, it's a collection of different businesses, but the one common thread that they have is they have a great opportunity to be enabled on how we deliver with digital capabilities. So we have a leading position in anesthesia, just brought out a new platform first in 20 years. We have a leading position, one of the top 2 in monitoring globally, also in the whole baby prenatal care area as well in some diagnostic cardiology. The one interesting comment about all of those is they play a big monitoring role, and they also have a lot of data that's shared across those. In that portfolio as well is where we'll bring to market things like Command Center and what we call CareIntellect, which are new digital AI tools that are focused on not just a product, but how products work in a department and maybe perinatal care or particularly in a diagnostic cardiology area where you take a look at our MUSE database, which is the largest EKG database in the world and how that information can flow through cardiology. So that's what you're going to see there. But again, what is interesting and there are a lot of interesting small tuck-in plays that can fit into that business to connect. She's got a great background there. And then we talked about this at our Investor Day. One of the big opportunities is to really transform monitoring to be a modality that just gives you a spot reading primarily in critical care into one that actually looks at your longitudinal data and can actually help predict when a patient may be in trouble. And why is that important? Well, if you don't have enough nurses in critical care or even the ward, it's difficult to cover all these patients. If the device can say, hey, Patrick may be having an issue and it's going to -- you need to go to see him within 20 minutes on their handheld device because the algorithm can predict if that's happening, that's a big game changer in monitoring. And then ultimately, in alternate sites and ultimately home. So we have lots of aspirations in that area. You'll hear more about launches coming in the future. There are some opportunities to tidy up the portfolio. But in general, we like the product lines and the businesses there. And I think the digital unlock is the margin unlock. It's also the growth vehicle capabilities for PCOs.

For the record, Patrick is always having issues. So it seems that accurate. There's been a few who try that kind of integrated care on the predictive analytics. And like what do you see as some of the challenges of doing that? Is it the data is siloed or that you have a certain number of steps, but then there's another manufacturer who's in the patient value chain there. Do you need to plug it all together? I know it sounds very vague, but we've heard from some companies trying to do this before and they've occasionally struggled to kind of end-to-end that patient.

Yes. I think, look, there's multiple levels. But at the first level becomes one is the customers migrating to the cloud is probably one of the biggest unlocks. So as we know, even pre-COVID, the amount of customers that even had the majority of their data in a cloud provider. And outside the United States, it's even a much smaller population. That's a big deal and the reliability of it. The second thing is the standards. I think FHIR now upgrading from HL7 is playing a big role within that. And then I would say companies like ours that are looking more longitudinally and can be someone that can integrate even other people that we don't compete with. So I think we've spent a lot of time on AI inside. So as you've probably seen, I mean, we have the largest amount of FDA-approved integrated AI tools in our products. The next move is how do you bring more of that connected across ours and other products in a given department. How do you make that process in that given area more predictable, safer, better outcomes. And so there is partnering that has to take place. There has to be trust with some of the relationships. But I think the enablement of cloud, some of the standards that are out there and really where the evolution of some of the large language models and what can be integrated. And there's a lot of things happening right now that are going to enable that.

I mean on the topic of AI in general, how do you separate the developments that are a requirement to compete with your peers versus the ones you get distinctively paid for? Because we've seen some that have been quite rapidly sort of commoditized. But by contrast, we've also seen some that like clinics have been really willing to pay for it very quickly. Like how do you think about strategically because AI is treated as this big monolith, but like where to put your time and attention?

I mean, simply for us, it's about what solves the biggest customer problem. If you can solve a big customer problem that has patient issues and financial and your solution has a better answer for the patient and solves a cost issue for the customer, it's usually a winner. And at least from that standpoint, you can really kind of have an end-to-end discussion. I think what's limited us, and I'll say us in many cases, device or even broader pharma is you come in with a point solution. And the problem is the savings are either downstream or upstream or the benefits there are. And so being able to have the C-suite discussion, which does lead into why do we have -- you hear more about enterprise deals, multiyear kind of enterprise relationships. Or in many cases, we have these discussions that, look, here's what we can help you do in cardiology. Here's what we can help you with a breast cancer strategy. And the discussion really is about how you could bring more patients in, how you bring better value during that, how do you actually take cost out of the structure. So to me, that's the area, which is why we've really doubled down on how do you optimize to make the best device by itself with using AI? Because at the end of the day, if it really does a lot different, I can get more price or more value just for the box. I'm not having to sell the AI separately. But when you move into the realm of this is a SaaS product or tool, you need to be able to talk their language, which is in this care pathway, in this value chain, how can you drive it? And I would say stay tuned. I think '26 for us will be a first year where we start introducing more of those capabilities.

Would you guys be open to AI software solutions that spread? And I think you actually do some of those but spread, modality -- not modality-agnostic, vendor agnostic in the sense that because one of the challenges is an independent company with these software solutions can be applicable to any of the installed base. But even though you guys are massive in some of the modalities, you're still 1/3, let's call it, roughly.

Yes.

Would you be open to an open architecture?

100%. I think it depends -- so there's areas where -- like just take something like Air Recon DL MR. We're using not pixel data. We're actually using reconstruction proprietary GE data. And we can do things there at faster capabilities that you could. And that's always going to be stayed there. When you move into the reading world, I think one has to do that because no one has an exclusive installed base of just our equipment or company A, B or C. So that's clearly a part of it. And I think when you start thinking about let's move into monitoring or even, MIC, infant care, you're connecting with other things that have to follow a standard. And so we think that makes sense. Obviously, the debate on how you get there. This is an industry that started DICOM and many interchanges that are out there. But I do think there's going to be aspects of both depending on where you are in the value chain.

On ultrasound specifically, I think anyone who's had a kid knows that the scan takes a fraction of the time and then the incredibly tedious rollable measuring of the spine takes like 2/3 of the entire meeting. How -- yes, clearly, we're very early on in the stage of like automatic image interpretation, management, those kind of things. Do you think you guys can get paid for that? Because you save the system a lot of time. I'm using just one example, particularly with ultrasound, which is skill.

Yes. No, ultrasound is one of those modalities that I mean we're a leader in we just launched actually just a couple of weeks ago, the first new big cardiology platform, if anybody has introduced in quite some time. And Patrick, to your point, embedded in it are multiple, multiple different AI tools. To the point that if you're looking in cardiology, the old days for the cardiologists that know this or folks who have used it to do a left ventricle kind of ejection fraction, you would actually drop points, you would do all this, you have to get the vintage at the heart. Now fundamentally, I simplify, but getting the heart image capture the actual device itself will get the right views. It will automatically do the outline. And you automatically move from what used to be a tedious outlining, getting all these views and you're trying to then get an ejection fraction number, which is what you want, the device itself can move right from all that to a number. And I do think this is one of the interesting evolutions of quantification in radiology and cardiology. We don't think about it much, but in EKG, a lot of people don't spend the time reading the waveform. The algorithms are so good and it gives you a number or it gives you, yes, there is an issue or yes, there is not. That's also the progress that's going to be happening on all these devices. But suffice to say, in OB/GYN on our Voluson product, the image quality you get of your child now rivals what used to look like a CT many years ago. And I think that's only going to continue to rise because we're finding new ways with algorithms, particularly driven by AI to be able to optimize them even more. And then when you add a suite of cloud-based capabilities that you can take this now in a handheld in Sub-Saharan Africa or intercity area to check for someone who may need a heart valve or has peripheral artery disease, there's just a lot that's happening in that space. And so we're super excited about that. And also the integration ultrasound will play with other modalities like we were chatting earlier in the cath lab or in the MR area.

Just quickly back to Vivid Pioneer. That's a great example of one of the NPIs we talked about at Investor Day that we expect this will help drive us towards that 1 to 2 percentage points of growth over the medium term.

Yes. So to that point, we talked about for us, one of the big focus areas since we became public 3 years ago was a big influx of R&D funds. And so we've close to doubled the amount of R&D investment we've made since 2018 and the goal, what did you do with the money? Part of that is how do we actually make sure we're at parity or leadership across all the major areas. And the first area coming out, proofpoint is this new cardiovascular ultrasound platform. And then you're going to hear more about things like Photon Counting. You're going to hear about whole-body PET, vascular suites, what's happening in monitoring. So we have a really strong cycle of launches that will be coming out later this year into '26, which will be strong growth for our orders portfolio in '26, starting to then really drive more even faster revenue backside, but really the '27, '28 window as we articulated then. is full of some great and exciting products. And I think, Patrick, the part that I'm excited about alongside that, we're also advancing this departmental view of AI tools. So we feel good about it, and the teams have done a really fantastic job executing on the programs.

Hopefully, you can drive some more downstream procedures for some other companies as well.

Yes. Well, I think the downstream procedure world, I think part of this will be, particularly if you take vascular. I mean one of the big issues we hear from -- on the heart valve side, the electrophysiology side is just getting time on in the lab. And so now we have a world-class cath lab, EP capabilities. We'll soon have vascular and also neurovascular. And all of those procedures right now are growing significantly. And again, you can't do them if you don't have access to a lab.

The one sort of area that's opaque that none of us ever have visibility into is China. Latest thoughts, I mean, it's been a roller coaster for the entire industry trying to understand what's going on, not long term, but more short term. What are you seeing at the moment? Like how should we feel about China from your perspective over the next 6 months?

Yes. So I mean, just perspective-wise, '24, that market was down double digits. I think for everybody for a lot of reasons, the anticorruption campaign that the Chinese government had. Again, we think over the long run is a good thing, particularly for multinationals, but that had an effect. And then this year, a combination of tendering that just took longer to get monies allocated, I think, than anybody estimated means this market will be flat to maybe slightly down some this year. So what does that mean for back half of this year? Some people are calling the market is going to pick up. We think that it's going to be stable, but not a significant growth play. We'll see who's right. Part of our estimates are all of the tendering just takes a little bit longer right now. And some of that's procedural for whatnot. I look forward and for us, with China, we've been very open about this. The days of 10% growth, we don't necessarily think are there. I think it can be a mid-single-digit growth market. But if it's a roughly flat, stable market, all of our midterm goals and strategies are well intact. And so we think it's heading that direction. I think all indications are it's heading that direction, but we're not counting on it being any type of a growth vehicle for the company.

One of the big contributions China had over the last 10 years, it was a source of a lot of installation expansion rather than replacement system like a proper growth. But people often think of the U.S. as just a replacement market. But is that still true? Because we're just talking about all the incremental utilization of radiology -- Is U.S. -- if you had to guess, put another way, what proportion of the systems that you place in the U.S. replacement versus like greenfield new installation expansion?

Yes. I mean -- so let me answer your question this way before I guess. It's definitely a growth market from new sockets because, again, just take the PET example. Every new PET system that goes to cardiology fundamentally is a brand-new system. A CT scanner that's dedicated just for heart scanning is a new system. And then the more that you're actually seeing this growth of what's happening in pulsed field ablation or with heart valves, those are new sockets that in the past were just PCA or stenting. So again, the more new procedures, yes, it's offset by some productivity that all of us in the industry bring, but the growth is tremendous. I think in China, you're going to continue to see growth. It's going to be more in the Western markets as they've outlined. It's a big set of folks. And then even in Western Europe, we are seeing growth. And again, coming out of COVID, I think we all know in Europe, bigger hospitals, more concentrated care, you have an infectious disease, you say, gee, maybe we shouldn't send all these people to one spot. We need to do more outpatient imaging. That's been one of the big growth drivers in the big 7 within Europe as more alternate sites. You see the rise of big, I'd say, customers for us, but providers now that actually provide services for government agencies around different countries. Those tend to be big partners for us that can put equipment in, and they're all new installs. I mean you think of the Middle East as an example, huge amounts of growth within new institutions, Saudi, other countries like that as well.

Yes. To your point, Italy, I know has a lot of outpatient imaging capabilities. In the U.S. as well is going that way. What's the difference in servicing those two customer bases? Like is it a modality difference? Is one more likely to get -- I guess, inpatient is more likely to be a 3 types of system maybe? I don't know. Like what are the differences in servicing a -- not an ASC exactly, but the sort of outpatient facility versus the big inpatient facility?

Yes. I mean it comes down to the services they're providing. Obviously, your echo or ultrasound typically plays a big role. Mobile x-ray imaging, our OEC platform is second to none. It has capabilities that even some fixed cath labs don't have. So in certain countries, that platform acts in many, many vascular procedures as well. You're starting to see a lot of orthopedics take place that only took place in the institution. So MRI imaging within centers is more and more prevalent. So we see pretty much a whole fleet of that. I would say it's less about the hard work config itself. It might be the software applications where you might be doing more sophisticated things in-house, but you actually have the same systems in an outpatient world. And that gives flexibility too, to move patients around depending on what's happening in your different locations. That's a big topic with a lot of our IDN customers is how do I think about my fleet and optimize it based on demographics and procedure priorities.

If I think -- just big picture finished up. If I think of Flyrcado, if I think of Vizamyl, if I think of the PDx reimbursement changes, if I think of the modality growth that you're seeing in China sort of getting into a better spot, is there any reason that '26 shouldn't be a top line much better year than '25?

Yes. Look, we're not here to give guidance, but it's a fair question. I think we're building a great backlog. So if you look at our backlog, we've got record backlog book-to-bill again, this combination of when that number is there, it means you're actually bringing in more orders than sales going out the door. And at some point down the road, those will go out. So we feel quite good about the setup that's coming into it. I would say as well with the new products that are launched that many of those won't be in a position to ship until late '26 into '27, it should be a robust orders opportunity as well to continue to build that. But we're each year expecting that we continue to improve. I mean, that's our focus. And I would say as well on top of that is our focus on M&A as well. And I mentioned on our last call, Patrick, that we see dislocation in the marketplace. What I mean by that is we're starting to finally see between private equity, other public that values are becoming more reasonable. And for us, all these items we talked about in products, there's a lot of small tuck-in deals. And I'm talking about, in this case $100 million, multiple hundred million dollars of deals that can plug in that give us a differentiated value across the value stream because a product by itself, someone can always have a better price, maybe a better feature. But when they work together and solve that customer problem we talked about, it's a big deal. So I think that's a really important aspect for us and focus on tuck-ins is what you're going to hear from us going forward.

We'll keep our eyes peeled. Peter, Carolynne, thank you so much.

Thank you.

Thank you. Appreciate it.