Outset Medical, Inc. (OM) Earnings Call Transcript & Summary

Well, thank you, everybody, for getting up bright and early and joining us this morning for Day 2 of the UBS Healthcare Conference. I'm Seth Damergy, I am a Managing Director in the Investment Banking Group, cover Medical Devices at UBS. And I'm pleased to introduce or kickoff for day 2, which is Outset Medical. With us today, we've got Nabeel Ahmed, CFO; and Jim Mazzola, Head of IR from Outset Medical. We're going to host a fireside chat, so I'm going to start off with some questions. If anybody has -- any questions, there's the QR codes on the table. Feel free to just send them across, and I'll ask away. But Outset Medical is New York NASDAQ-listed med tech company, high-growth company playing in the dialysis space. And with that, I'll kick it off. So exciting times. Exciting times for medtech indeed. Thank you for making the trip out here.

Yes, Seth, thank you for hosting us. It's great to see everybody. And we appreciate being out here.

That's great. So Nabeel, maybe we'll start with inflation. I thought with -- from a macro perspective, I mean, inflation is in the news every day. Lots of companies are talking about it. Maybe just broadly speaking, how do you see inflation impacting the dialysis market Outset in general. What are your thoughts around?

Yes, Seth for sure. So inflation has been in the news a ton. Dialysis is an interesting corner of medtech where the patients we serve need their therapy, whether it's an inflationary environment, whether it's a COVID environment, no matter what it is. And so from an end market perspective, we really haven't seen any impact on demand. I mean, I'll analogize to COVID, where we did not see any real impact on demand through COVID, and we're able to grow right through that. It's the same thing as it is today. In fact, what we're seeing from an inflationary perspective is that the outsourced dialysis providers, the ones who currently serve hospitals are seeing increases in their cost base and are, in fact, walking away from hospitals. So we've had examples, Seth. One came up and Leslie talked about it on our earnings call, where an outsourced provider gave a hospital notice that, hey, they're going to pull out immediately. That hospital called us and we were able to get them Tablo and get them up and running 72 hours after we got the call. So inflationary pressures, particularly as they apply to the incumbent providers have been a little bit of tailwind to us on the margins so far.

So that's interesting, just so we all understand that. So that specific example is referring to the human capital, right? So DaVita, Fresenius the providers, they're experiencing this higher cost of human capital and for a hospital, that's where Tablo is much more beneficial, I guess?

Yes, absolutely. So we designed Tablo to be simpler to use for both clinicians and obviously, for patients. And in the acute setting, today, pre-Tablo, a hospital may need multiple dialysis devices to do ICU training or floor training, meaning bedside trading rather or treatment rather. And with Tablo, you can have 1 device that will do dialysis in the ICU. It will do dialysis at the bedside. It will do dialysis sort of everywhere you need. So number one, we offer clinical versatility and simplicity for their providers. And then number two, what we really provide is economic benefits for the hospitals. So when a hospital who is currently outsourcing switches to Tablo, they start to see savings on day 1. I mean, currently, the ICU, Seth provide -- a hospital may pay $1,200, $1,300 per treatment to their outsourced provider. With Tablo, the marginal cost of the dialysis treatment is sub-$100. And so literally, they start to see payback immediately. They see payback in months for their whole Tablo system. And so again, in an inflationary environment, that's been a huge benefit to hospitals.

Maybe just to continue on that topic because I think this is extremely interesting. And from where I sit, I keep hearing more and more about hospitals, bearing the brunt of higher increased labor costs, device prices being pushed through to the hospital and decreasing profitability at the hospital. So essentially, maybe you're taking something that was a cost center and now making it a profit center.

Well, what we're doing for traditional dialysis, so hospitals are required to provide dialysis and they are not reimbursed incrementally for it. So dialysis is embedded in the DRG code for whatever procedure they are being reimbursed for. So dialysis is a cost center for hospitals. And what we're doing is reducing that cost compared to what they're paying now. Now interestingly, the other thing that -- the other element of our strategy is that we're going to these health systems, these hospitals and saying, look, instead of passing patients off to DaVita, Fresenius for their chronic care, you, hospital X can stand up a home dialysis service line, which is revenue accretive, which is operating margin accretive and you can actually bolster your economics, leveraging Tablo and both capture the revenues and avoid the cost of having that patient crash back into the acute setting if they go off to a DaVita or a Fresenius. So we -- our primary play is the cost reduction in the acute and then sort of leg 2, if you will, Seth is, look, you can actually stand up a new accretive service line.

Okay. That's helpful. Maybe if we continue just on these macro trends for supply chain for Tablo, are there any components like where you're experiencing shortages, chip shortages, things we hear about in the news that's impacted your potential supply chain?

Yes. Supply chain has been fun to say the least through the last couple of years. Look, it's trench warfare for, I think, every supply chain team and our team is no different. Now what's interesting for us, we started producing Tablo 3 years ago-ish. And from the day we launched Tablo, we have known that we have got to drive the cost down of our console that's in service of our gross margin expansion objectives. And so because of that, our team has sort of got this nimbleness, the sort of supply chain wizardry, and I hate to use that word, it's sort of within our DNA, right? And so we've employed strategies like buying up components where we know we're going to need them for a long time, and we can get a good price. So we've got a ton of inventory on our balance sheet, display design, lots of components where we know, hey, we can get 2 years' worth, 3 years' worth, let's just buy it up. We've had a constant program for redesigning parts, qualifying new parts, again, both in service of making sure we're driving the cost down on Tablo, but also making sure that we can maintain supply chain stability. And so we've been able to mitigate a lot of the -- all of the actually component shortage, component cost increase issues, and we haven't faced that any component shortages that we've sort of not been able to mitigate. We've never had a stock out. We've never been unable to meet customer demand. The other area where we saw going back to your inflation comments, we saw freight costs really increasing sort of summer last year and beyond. And so where we were really seeing that was on our cartridge which today is built primarily in Southeast Asia, we moved that manufacturer to Mexico that is undergoing right now. By the second half of this year, most of our cartridges will be made in Mexico and we'll have mitigated that freight issue structurally as well. So lots going on. We have an amazing team. None of this is rocket science, but we've been at this for a while. And again, we have a lot of confidence in our ability to mitigate what we can see, and we have a lot of confidence in our objectives to expand gross margin from roughly 8% last year to high teens this year.

That's fair. And I want to get to the margin and your long-term goals. So maybe let's pivot. Let's pivot over to the product. So for Tablo. I've heard you say countless times from a benefit standpoint, we're reducing the complexity. And I think from a deliverability just of all the complexity of dialysis in general. Maybe can you just take us through the high-level benefits and issues that you're really solving for patients and providers because, I mean, dialysis is a -- it is a complex industry.

Yes, absolutely. So let me start with the providers first. On the provider side, again, in the pre-Tablo world, hospitals were forced to have multiple devices to deliver dialysis. They had a device or devices in the ICU to deliver these long, slow treatments. Again, these are 24-hour treatments, in some cases for the sickest of patients, and then they've had to have separate devices to use at the bedside to deliver kind of the more -- what you may be more accustomed to the 3-, 4-hour treatments for patients. And then there's yet different devices to send patients home or in the clinic setting, right? What Tablo does, it's 1 device that can do the 24-hour treatment. The same device can then be wheeled over to the bedside and do an intermittent dialysis treatment. And then the same device, again, if you choose, can be sent home with a patient, again, with just a software tweak to make it the consumer version of the software. So from a provider perspective, it was really about simplicity. It was really about clinical flexibility. And again, just the nature of Tablo's design allows it to deliver treatments on much, much cheaper than outsourced providers can do, right? So that's part 1. Now with respect to the patient, we really designed Tablo to be a consumer device, if you will. It's 15x36 inch box. It folds up and it doesn't look like a medical device. That was a big design goal. Once you're done with it, you can sort of put it away and it just looks like a box. It has a touch screen. So again, for consumers, they can use this device very simply. It walks you through what you need to do. It does -- it builds dialysate on demand. So there's no need to batch dialysate. There's no need to sort of premixed dialysate, which the incumbent home device required you to do. And then finally, it has its own water purification center kind of at the bottom. So there's no need to have separate water, to have a separate RO, anything of that sort. And all of this was really designed into Tablo when we first launched it for the home in early 2020. So we've been sort of at this for a while now. So again, all of this, Seth, particularly with the patients is in service of making sure that patients who remain on therapy. And 1 of the things that Leslie has talked about at length on all of our calls is that we're really proud of the retention rate that we have with patients on therapy. The previous device at home we're sort of seeing attrition in the 40%, 50% zone with Tablo. Again, going back to our IDE, going back to sort of when we first launched in early 2020, we really haven't seen meaningful attrition. And we certainly -- our attrition is much, much lower than the incumbent device.

That's fair. I mean mentioning the incumbents in the hospital, in the home, big companies, right? Large caps, large presence, I mean how can you compete not just in 1 setting, but in 2 settings is a smaller company. I mean I'm guessing based on all the benefits you're providing, I mean, that's obviously a starting point, but they're not going to just roll over.

Yes. Look, so in the acute, it goes back again to clinical versatility and to the economic benefits that we have proven time and time again with Tablo. So we literally, when we sell into a hospital to in-source, we ask them, hey, look, you're paying x thousand dollars per treatment in the ICU with your incumbent provider, come to Tablo and you're paying a marginal cost of less than $100 per treatment, we show that to them. We literally walk in with an Excel model that shows the hospital what they can save. And then we come in 30, 60, 90 days later and prove to them, here's what you have saved. And time and time again, we've proved that, that is beneficial to hospitals and sort of that model works, right? And then with respect to the home, let me now break the home into 2 segments, right? So in the home, you have these midsized dialysis providers, satellite health care being an example. It's 1 we press released last year. These midsized dialysis providers, and there's a few of them, they still manage in the thousands of patients, right? They still treat into thousands of patients. And these folks are looking for a way to differentiate themselves against the DaVita, Fresenius. And so what we do is we go to them and say, look, use Tablo, send patients home, you can expand your census, you can differentiate from DaVita, Fresenius and you can benefit from the reimbursement tailwinds that exist for sending patients home. There is the long-term ESRD treatment choices model that provides for higher reimbursement or potentially a penalty if you don't meet a particular home dialysis census. And in the short term, there's types, which is this add-on payment that Tablo only 1 for the providers who go home with Tablo. So that's the pitch to sort of the midsized dialysis providers says, hey, here's the way you can take share. And again, for the health systems, and this is also resonating Seth, particularly in a time when hospital P&Ls are coming under pressure, not only are we offering the opportunity to reduce cost, but he stand up an accretive revenue-generating service line. And the -- that has resonated well with providers.

Absolutely. We have 1 from the audience. I think it's around the same kind of context. So I'll just throw it out there. It says, with the move towards cheaper at-home dialysis options, aren't you swimming upstream by trying to put machines back in the acute care setting?

So remember that 60% of dialysis patients crash into the acute. So folks crash into the acute, and that's when they realize their kidneys have failed, and that's when they sort of get on dialysis and then need to be managed whether it's to the clinic or the home or whatever. And so when we're selling into the acute, this is where hospitals have no choice. They have to provide dialysis. Today, they're providing it using an outsourced partner. And what we're doing is coming to them and saying, "Look, you're already providing this service, you have to do it in a cheaper way". So we don't view -- and maybe if I may understand the question, let me know, the acute is not competitive with the home, those are sort of -- those are related markets.

Yes. I mean that -- I think that transition model, I mean, that's kind of where I wanted to go is this is a whole new way of thinking, right, for the hospital.

It is and it is. Dialysis before DaVita, Fresenius came into the mixed, dialysis was done at home. It was initially prescribed as an at-home therapy for folks. Now this is the devices where this is 40s, 50s era technology. So you can imagine it wasn't a pleasant experience. It required a lot more -- it was a more involved process. And so the center model makes sense. But what we're now doing realizing that the limiting factor or the barrier was technology and ease of use. What we're now doing is sort of removing those barriers and pushing dialysis back to where everybody agrees it belongs pre-DaVita, pre-Fresenius back in the home. So it's not a new model, Seth. It's a reversion to I think what clinicians think would say makes the most sense.

Got it. And as you kind of start to address these hospitals, one by one. Do you go after the -- at the IDN level and do you then see wider adoption across a network? Or is it spot like facility by facility?

Yes, our strategy is land and expand. And what we started out doing was signing -- last year, we talked about signing 7 of the large 8 nationals. We now have that left 8 pulled out. So we've signed MSSAs with them. We've then last year talked about going after 1/3 of the top 100 regionals, and that strategy is continuing. So we're really going top-down citing MSSAs with a parent and then proliferating devices through all of their acute hospitals and then also working with them to then send patients home as sort of the leg 2, right? So step 1 is get them to sign in the acute. Step 2 is then leverage those relationships to build home programs.

Got it. And I think on step 1, you've clearly -- especially like last quarter, done well in the acute care setting, continue to do well in the home, but 2 different sized markets, I think. How do you -- it feels like acute is going to be -- nothing is easy in the market, right? But you found your pathway there. How confident are you that you can build this home option where others have failed?

Yes. So acute is still a $2.5 billion market. And if you look at our penetration relative to what we think the market size is, we're probably still only high single, low double-digit penetrated from a percentage perspective into this large acute market. So still a long way to go, land and expand is our strategy and will continue, and it is working well. With respect to the home, we are -- this is a roughly $9 billion market. We're in very early innings and have seen good progress to date. One of the things that our health system customers told us, nobody that we have spoken to rejects the notion that home makes sense. Where we have gotten feedback is, look, we love this idea. We need your help and how do we go execute it. And so we launched this destination home program that Leslie talked about in our last call, which is a program where we bring partners in to help a hospital, help a health system, stand up a home program, identify which patients are eligible to go home, get the hospital certified. You need a CMS certification to run home dialysis. And so we've built this program as a way to, again, accelerate the transition of patients home.

And on that home aspect, I mean, back to the benefits of the patient. I've seen this slide in your deck, and it's great where you kind of have the check marks as to what people really like. Maybe take us through what are those key aspects that as a patient, you really feel like you're benefiting from the Tablo system?

For sure. The big thing is simplicity, right? Tablo, number one, when you approach Tablo, sort of the training time for Tablo is under 2 weeks. We've seen the main trading time going back to our IDE, going back to when we first launched Tablo at home, sub-2 weeks, closer to 10 days. On the incumbent device, it was north of 4 weeks, 4, 6, 8 weeks in some cases. And so the first thing is that the training time on Tablo is significantly reduced. Secondly, the actual setup of Tablo once you get it into the home is very simple. All you need Seth, you need power, 110-volt household outlet. You need a tap and you need a drain, right? Easy to sort of set up, the worst case you may need a plumber, right? But it's pretty simple.

Not New York City.

We have Tablos at home in New York. We have Tablos at home in New York. I'll say that. And so it's simple to set up. And then number three, the actual treatment setup is very simple. There's a touchscreen, it has pictures, it walks you through how to actually use it. We have 1 example, Leslie talked about in the previous call, where we've had somebody who has not even had a high school education. He's a patient that he's able to navigate Tablo because of the simplicity because it's in pictures, right? So there's a touch screen. And then our cartridge or disposable is very simple. It's something you can put in with 1 hand. And again, once you're done treatment, it all comes apart, you can close it up. It does not look like a medical device. And so basically, it's the simplicity of the device that differentiates it. And again, what we're proudest of is that our retention rate, the sort of people staying on therapy much higher than the incumbents and something that we're laser-focused on keeping that way.

Yes. I mean, look, I think that -- it's funny when I hear you kind of say that like plug it in water supply and the incumbent, as I understand, has -- you need a whole room of supplies, you need -- you need to monitor deliveries. I mean, there's actually a lot of complexity in delivery?

Yes, we talked in 2021 about 2021 being the year of go-slow to go fast. And what we were really doing was making sure that we could perfect the patient experience, right? It was unglamorous stuff like making sure we have the right delivery partner who's not just going to leave this box at the door, but it's going to walk Tablo in as the patient where do you want it help them set it up, all of that stuff. We wanted to make sure that when we boxed our cartridges that again, that box wasn't intimidating that a week or a month worth of supplies was not going to take your entire apartment, but that it can fit into a closet. And so it was this same glamorous stuff that we spend 2021 doing and that we believe is in a good place now to support our patients.

Maybe if we pivot a little bit just to the financials. So -- and maybe let's kick off, if you could just remind us of your long-term goals that you've set out for the company, that would be helpful?

For sure. So first of all, let me just talk about this year and our guidance, and then I'll talk about the long term. So our revenue guidance for this year, we lifted it a little bit. So we're $144 million, it's $150 million, 40% to 46% year-on-year revenue growth. Our next goal was with respect to our home patients where we said we'll get home revenues to more than double to being roughly mid-teens as a percent of 2022 revenue. And then number three, from a gross margin perspective, we said margins will expand from roughly 8% in 2021 to high teens in 2022. And this is all sort of working towards our long-term goals. And the big 1 for us is getting gross margins in 2025 to roughly 50%. And then the second goal we've articulated over the long term is that we expect to exit 2024 on a breakeven basis from a cash perspective.

So maybe if we go through each of those. First on the margin -- from a margin perspective, I mean, can you outline for us the margin differential between hospital home? And how does that blend get to 50%?

Yes. So Seth, the list price for Tablo in the acute in the home is broadly the same. The cost of our cartridges for the acute and the home are broadly the same. What we see in the acute setting is we see higher ASP because I talked about the ability for Tablo to run 24 hours, there's an upcharge for that feature that we charge for the acute setting. And so what you have is the effective ASP in the acute is higher. We call it the XT feature, and that sells well. So we have a slight ASP improvement for the acute relative to the home. But otherwise, both are priced very, very similarly. And so there really isn't a big difference, if you will, between margins home versus acute. All of that, we expect both markets to grow with home growing faster as a percent than acute, all of that is baked into sort of our long-term margin guidance.

And then for -- is there an inflection point where home overtakes acute? Is that within your near-term vision? Or is that further out?

That's probably further out. Home will grow. Home will grow faster than acute. And we believe -- look, we believe the inflection has happened this year where we're more than doubling our home revenues from 2021 to 2022. 2021, our home revenues were sort of single-digit percent of 2021 revenues. And this year, we're sort of guiding to mid-teens as a percent of revenue, which implies more than doubling. So we believe the inflection has come. We believe home will grow really, really fast. It's a massive market, but acute will grow as well, and we believe the combination will get us to that roughly 50% margin in 2025.

Okay. Got it. And then if we move further down the P&L and to get the cash flow breakeven, you're going to have to get a lot of leverage out of rest of the P&L. I'm guessing the infrastructure that you've built is adequate for future growth, and you're going to get, I guess, a lot of G&A and sales and marketing leverage.

Yes. So we're obviously looking for revenue growth. We're looking for margin expansion. That's a huge part of our story, getting margins from being high teens this year to roughly 50% in 2025. There's going to be a linear ramp in our margin trajectory, right? And so that margin trajectory, by the way, comes from cost down. It comes from leverage on our service team. It comes from more consumables sold as our installed base has grown, but that's a big part of the story. And then yes, we are going to see OpEx leverage. We've made a lot of the big investments we've had to in things like G&A and R&D. We'll continue to see those at lower rates of growth. And what's really left is now investments that are tied to revenue growth. So you'll see us add clinical sales reps, you'll see us add field service engineers as we need to support a larger installed base. But again, that growth rate on OpEx will be slower, and we will get leverage from OpEx.

Got it. And then -- maybe if we talk about connectivity, I mean, I think this is a unique market in the sense that you are connected to your patients, you're able to capture a lot of information data. At this point, I mean it's probably still nascent, but is that something that you see value and benefit in, in the future for the company?

Yes. So right now, our connective -- so Tablo, as a reminder for folks, is the only dialysis device that's got 2-way wireless communications, so it's WiFi-enabled. Right now, what we do is we leverage that technology to upload treatment data into a provider's EMR or we have our own cloud offering where providers may not have or may not have an EMR or may not want it integrated where the provider can monitor Tablo, monitor the treatments. So right now, it allows us this connectivity into the EMR and this cloud. Now over the long run, absolutely, we get Tablo measures 500,000 unique pieces of data for every treatment. And we have that data obviously anonymized, obviously, sort of aggregated. We have that data that comes into our network, again, obviously anonymized, obviously sort of treated very sensitively. And so we do have that data available to us. And we use it right now, it's to sort of make sure that we're monitoring and improving device performance. But yes, there's a lot we could do with that data in the future, for sure.

Got it. Maybe just a couple more from me. The -- so okay, if we think about the market right now, I mean, a lot of, I guess, the economists, even UBS, I mean there's a people point to recession all the time. I think we touched on this a bit with the macro questions, but -- how do you think in that environment, how do you think that bodes for Outset and for Tablo? Is that a tailwind? I mean it feels like it could be.

Well, I don't know if it's a tailwind necessarily, again, Seth. Dialysis is interesting because our patients will need treatment, no matter what. And so the end market exists, there are always folks going -- we predict the dialysis market is going to grow sort of low single digits over the next many, many years. And so we don't see that changing, and these folks will need their treatments. With respect to hospitals in a recessionary environment, I have to imagine that Tablo's ability to reduce their cost of dialysis becomes more appealing. Now again, that could be on the margins, that could be a major thing we don't know, but sort of Tablo's ability to reduce cost disciplining. And then number three, these folks need dialysis. And again, I believe that for a hospital this notion of being able to send patients home and capture the economics associated with that patient, stand up a new service line with both increased revenues and increased margin is appealing. And so I certainly hope there isn't a recession, but I do believe that Tablo's value proposition in both the home and the acute means that it would be on the right side, if you will, of a hospital of a health system should there be pressure on their P&Ls.

That's fair. Maybe just 2 more for me. The international markets, strategy, thoughts around the market. Obviously, it's a different in reimbursement environment and harder to penetrate languages. There's a lot of, I think, challenges to adoption. So how do you think about international?

Yes. So international for us is a when not if. We hired our Head of International mid last year, and we are literally undertaking our how and when do we go about it, where do we go first, all of that stuff. The thing that's really important to us before we go into any market is that it has to be margin accretive to us. What we don't want to do is to go into a market and grow for growth sake. We believe there's enough growth here in this market, $2.5 billion acute, $9 billion home. We believe there's enough growth here for us for years to come. And so we're going to be very judicious about when and how we go international. But absolutely, dialysis is a huge market outside the U.S., and we do believe we will be there.

It's super helpful. Thank you for the time. So as a CFO, maybe take us through what keeps you up at night? What's the thing that you kind of think about? There's so many different variables in your business, I mean, what do you think is the potential hit fall people should just be mindful of and frankly, on the flip side, too, I mean what are the tailwinds that investors maybe are missing?

Yes. I mean, Seth, we are focused internally. I am focused internally on basically 3 things, right? One is driving revenue growth such that we can get our business to grow between 40% and 46% year-on-year. That comes from both the home and the acute settings and making sure we're performing in both of those markets. Number two, we're focused on driving margin expansion, getting from roughly 8% last year to high teens this year, right? And again, in this -- I call it supply chain fun, in this fun environment that's -- there's work to go do there. And then number three, it's about sort of getting patients home, right? And again, there's work that has to happen to get from here to where we aspire to be by the end of the year. And so that's what -- nothing really keeps me up at night, but I think what we're really focused on is execution across those 3 big goals.

That's great. Well, look, I mean, I think we've got a couple of minutes left. I don't know if there are any other questions. We have 1 last up here, the chicken fire actually, it was how does revenue mix -- how does the revenue mix look going forward as you land and expand your capital versus consumable/service?

Yes, absolutely. So what we've said -- so today, console is roughly 60% of our revenues, treatments are roughly 25%, services roughly 16%. That was what we printed in Q1. As we move forward and we have more consumables pull-through, you'll see roughly half of our revenues become consumables plus service. So you'll see consumables grow again as the installed base grows. We haven't given specific long-term guidance, but we absolutely do expect that consumables will grow and the combination of consumables and service, which we consider to be our recurring revenue elements will become roughly half of our revenues, up from about 40% where they are today.

And on that capital consumable, I mean, as you monitor pull-through in an institution, do you see inflection points for institutions ultimately buy second or third Tablo systems or they become more comfortable and it becomes more widely adopted?

Yes. So we don't do, Seth. We don't do kind of these trials where we'll put 1 Tablo and see how it goes. What we tend to see is a hospital or a health system will come to us and maybe put Tablo in 1 of their hospitals and then expand to the rest of their hospitals, but we might see them do it sort of in 1 geographic location and expand to other locations. That absolutely happens. In fact, when we look at our sales, our bookings, we look at sort of what's new logos and what's expansion, and we're really proud of the fact that we have a large amount of expansion sales in any given period. And so that's absolutely something we look at. The other thing from a utilization perspective, utilization to us means the number of treatments we sell for every console. And we absolutely see that as customers become more tenured, they do more treatments using Tablo because they're more comfortable it's displaced other technologies they may have had in other hospitals with their system.

And then as these institutions become more comfortable with the system. Obviously, a lot of training goes into adoption. Does that create a bit of a moat for you, if you will?

Yes, it does. Again, I think the bigger moats for us are around: number one, the clinical versatility. There is no other device that can do treatment all the way from the ICU to the floor to the home. I mean like same box. The only thing -- the only tweak we'd have to make is a different software for the home, which is an over-the-air upgrade, right? So number 1 is the clinical versatility. And then the other moat that we believe is the training to your point, for patients, because for patients, it's sort of sub-10 days, whereas for incumbent devices, it's much, much longer 4, 6, 8 weeks in some cases.

That's great. Well, I think that wraps it for me. I truly appreciate it. Thank you for allowing me to put a research hat on for a day and do a fire side. Thank you, Nabeel. Thank you, Jim.

Thank you. Thanks, Seth. Thanks, everyone.