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

All right. Good morning, everyone. Welcome to day 3. We're kicking it off with Outset Medical. I'm Jamie Perse from the health care provider team at Goldman Sachs, and we have Nabeel Ahmed from Outset, the CFO. Thank you for joining.

Jamie, thank you for having us. Great to see everyone this morning, full house as we'd expect.

Well, let's start with -- I want to just kind of loved on what you're seeing from your acute care customers and just what the environment is like hospital financials and just get a little context for what they're going through. So first, what are you seeing broadly in terms of their own financials, how willing are they to embark on these new programs and experiment with new things and invest capital in these new programs.

Yes. I mean, in so far as we're concerned that Tablo and Outset are concerned, what we're seeing is stability in the capital environment. Tablo's value proposition really is about saving hospitals money in sensor dialysis or in hospital dialysis is not reimbursed folks, for those of you who do know. And so again, we help hospitals save money. Our ticket price is also not that large, all things considered. And so again, as far as we're concerned, hospitals are willing to invest, we are seeing a lot of engagement. We walk in with the financial model when we talk to hospitals, they see the tangible savings. They see payback of less than a year. And so from our perspective, I mean, it's going well from a capital perspective.

So you started talking about things I think you will address in this next question, but when you are marketing to the incremental customer, someone who doesn't have Tablo yet and you're pitching this to them. What are you leading with? And what's resonating with these customers?

Yes, Jamie. So our sale is a C-suite sale. And so we walk in, literally with the financial model to the hospital executive team, and we show them how much money they can save either in-sourcing their dialysis with Tablo, most hospitals in the U.S. outsourced the provision of dialysis within their 4 walls or even for hospitals who do their own dialysis with existing machines, older machines, we show them how Tablo simplicity, the fact that we make dialysate on demand and the fact that we purify water on demand, how that can save them money. So our sale is really walk into the C-suite, [ pull ] the financial model and show them how we're going to save money, that's where we open.

Okay. And you either customized to their operations and their dialysis needs, specifically.

Yes, there are. So we have -- there are estimates you can get from some of the data providers of how much volume dialysis volume hospitals do. And so we have access to that data that's commercially available. So we walk in with a perspective on look, here's how much volume you do, ICU, non-ICU. It's not perfect, obviously, but here's how much money we can save the discussion then is around, well, this is our actual volume. What are you paying either an outsourced provider or whether your labor rates or how much time do you spend doing these various activities. So yes, it's -- this framework is the same. We walk in with a point of view the discussion is customization. And importantly, once we have that conversation, nobody throw this out or hangs up the phone, proverbially speaking, it's a compelling conversation for these systems.

So how does the potential savings and I guess, realized savings, probably more importantly, vary by system? Are there systems that are really right for this kind of -- these types of new programs? Is it [ set ] segment? Is it very broad the potential customer base? Just give us a sense of who the customer is that might benefit most from Tablo?

Yes. So it's really every hospital who offers dialysis. We have customers who are very large systems. We have customers who are small systems large hospitals, small hospitals, all of whom benefit. And again, so something like 60% of people who -- of hospitals who offer dialysis today, they outsource it, right, Jamie? So in an outsourced environment, we have heard customers paying as much as $1,200, $1,500 per treatment in the ICU setting. You contrast back to Tablo where the marginal cost of a treatment. So it's the cartridge, it's dialyzer, glove, syringe, the marginal cost of the treatment is sub-$100, and then you put some labor on it. So there's still a lot of daylight between the $1,500 and what you would pay for a treatment on Tablo. And so that savings is realizable for anybody who does dialysis. If that example as an ICU example, but again, most dialysis patients sort of crash into the ICU. And so that's very tangible for hospitals. And we have demonstrated -- we've demonstrated this in sort of it's in our investor deck. We've had customers who've spoken publicly about the fact that they've saved over 50% of their dialysis pre-Tablo dialysis costs by converting. So it's really applicable to everyone.

Two examples that are non-ICUs?

In the non-ICU, the savings are not as drastic, but they are still savings. Again, the ICU is the 1 that is more relevant because with incumbent technologies -- in ICU, the treatment may be 24 hours. With incumbent technologies, number one, you have to have purified water plumbed into the machine. And then number two, somebody has to make the bags and bags of dialysate. Someone has to -- prescriptions might be different. So someone has to manage different dialysate prescriptions. Someone has to store it, card it up. And over a 24-hour treatment, you're using a lot of the stuff, right, a lot of dialysate. And this is where our ability to make dialysate on demand really comes through because you can almost set it and forget it. I mean, you're going to monitor it, which you can also do remotely at the bed side, you still don't have to bring the dialysate batch, make it, bring it up, change it, but you will use less dialysate. So the savings while present are smaller on the floor.

I mean the savings are obviously compelling but not every customer just jumps on board on day 1. So what are the pushback? Why are hospitals hesitant? Or what do they asking for more data on before they adopt Tablo?

Yes. So the good news is the value proposition resonates. The good news is we see the financial model and folks are like this makes a lot of sense. And then the conversation shifts to staffing. It shifts to how because hospitals have outsourced again, 50% of hospitals with outsourced dialysis. So these customers, they have only known a world where somebody else comes in and execute dialysis within their 4 walls. And so then we talk about, okay, to do this to harvest these savings, you do need to hire a small number of nurses. It could be as little as 2. It could be as many as sort of low double digits, if you are a very large if you're a very large facility, right? And so then that's where every conversation shifts is staffing, where do I find these people? How do I find them, how do I train them. We have, over the last year, developed tools and techniques where we can help them with, a, here's -- we don't hire people for them, but here's where you can go look for talent, we can connect them with others who have been successful other customers. And then in Q3 of last year, we launched our Bridge program. So for customers who are really sort of gun shy for lack of a better term around staffing, we say, look, you can rent our staff. We have nurses, dialysis nurses on our team, you can rent those nurses. And again, you can stand up your program with our people with the goal that you will eventually cut our people off. And what we found with the Bridge program, Jamie, a lot of customers with Bridge or start with some -- start with some reticence for lack of a better word. And they find -- we've had customers who signed 3-month Bridge contract. And in the first 4 weeks, they're like, okay, we found everybody, can we send you home to which we're like, yes, that's not a big deal.

So is the labor market getting better? Is that good for your business? Or I just think the challenges across the labor market seemed to be a key thing impacting adoption. The progress that we're seeing in the labor market. Is that good for the business or.

Yes. We are seeing stability in the labor market as we as sort of it applies to us. And [vacant] to our guidance range is the fact that we need stability. So we're not looking necessarily for improvement baked into our guidance range stability, which is what we're seeing.

There's obviously a revenue opportunity as a customers adopt home program. I'm curious just maybe I'm getting ahead of myself here, but for customers who have adopted the acute program, how easy is it for them to kind of think about incremental revenue opportunities as they evaluate the use of Tablo?

Yes, that's very much what we are focused on. So our strategy has been land and expand, land first in the acute setting, stand up the in-center or in hospital rather provision of dialysis with Tablo, expand across the acute and then to stand up home programs. It's the same sales team who accomplishes this. It's the same sales team that initially pitches the acute insource and then the [indiscernible] expands to home. We have had early success in this hospital to home journey. And 1 of our goals for this year, which we talked about [indiscernible] is to have 2 large health systems stand up these home programs. And so we'd love to update you on that. we move through the year.

Yes. What's the pipeline look like right now of customers coming on board and just your visibility this year in terms of new acute adoption.

Yes. Just a quick step back to me, if I may. So our strategy in 2021 was the land, all the national health systems to sign [MSAs] for them to get a large number of the big regional sort of signed up -- and so we've done that. We accomplished that in '21. And then now what we're doing is, obviously, we're still signing new logos, that's not going to stop, but we're also working to expand within these systems. On our last call, we talked about a 50 order, a 50-console order, which is a large order for us, that was an expansion, right? A couple of quarters ago, we talked about how our average deal size ticking up again, as we are working through more and more expansion. So from a visibility perspective, a pipeline perspective, more of our revenues are shifting to expansion revenues. And given sort of the fact that we've signed up these logos, we've got these expansions, we've got really good visibility for the year. We've always had a high visibility business. again as more of that shift to expansion, the visibility gets.

Okay. Okay. Perfect. Let's go to the expansion piece. What sort of capacity to hospitals that our current customers do they have to incrementally adopt maybe we can segment it 2 ways. Of course, you have some hospitals that maybe have partially adopted this in their 4 walls and then you have systems that have maybe adopted in a handful of facilities and then there's incremental facility. So just in terms of capacity for incremental expansion in [indiscernible].

Yes. So first of all, at a super high level, we've estimated our market size in the U.S. alone at between 30,000 and 40,000 consoles from a TAM perspective, right? And so we print our installed base annually 3,200 consoles in the acute entering '23, we're probably low double-digit percent penetrated across kind of -- across the U.S. Tablo installed base, if that makes sense. Now with respect to our current customers, we have some where we are deeply penetrated. We have others where the penetration has only just started. And I'll take you back to this example, Jamie, from Q1, which I think is really powerful because this is a customer who initially bought from us a couple of quarters ago, they did 1 of their facilities. They came back a couple of quarters later and did this large 50-console orders so now we're permeating further into their facility. So it really matters, but it really sort of it really depends on the facility. But what matters what's important is that there's a lot of runway here ahead of us [indiscernible].

How long does it take? I mean, I know there's a range, but for hospitals to kind of get comfortable and I mean what's the typical cadence?

Yes, it really, really depends again. So with hospitals who do the outsourced to in-source, what we see is as their contracts with their existing outsourced provider sort of come up for renewal, they will not renew and go with Tablo. And remember, a lot of systems have acquired hospitals over the years. So these contracts aren't always coterminous. So we see that a lot. We've talked about our average sales cycle being 9 to 12 months. That has remained stable, which we're really pleased with. And sort of say that's kind of what the cadence looks like, all things considered.

Okay. Let's move to the utilization piece, the just the run rate of...

Consumable.

Consumables. Yes, thank you. Your 5 treatments per week per console where you're at, it's been moving higher, but it doesn't strike me as like these things are running all day, they're at capacity. So what's -- I guess, the upper limit on utilization per -- per console? And where do you think we're headed at maturity for a given [indiscernible]?

Yes, for sure. So first of all, broadly speaking, there are 2 places where Tablo is used. One is in the ICU. And in the ICU, you're typically doing 24-hour treatments. So in an ICU, you probably need a day to sort of clean your ICU or whatever. So theoretical capacity at max is probably 6. No one runs their ICU at full steam. So you're probably 2 to 3 is the theoretical max in an ICU. Again, every hospital is different. And then on the bed side, you can do 3, 4-hour treatments, you can get 6 done in a day. That's pure math. And every hospital, as you'd imagine, blends that you nobody is running 6 treatments per day every day, right? And so the reason sort of guided and talked about this 5 treatments per console per week is because that is literally what we are seeing from our deployed ramped console today. And that is a relatively consistent going back, you may remember going back to the IPO. That's what we saw is we continue to see it's a blend of consoles in the ICU and on the floor. It is not a cap. We have customers who may be more bedside heavy, like they don't have as many in the ICU, where we are seeing double-digit treatments per console per week -- that just happens because of their patient mix, right? So utilization will depend on your patient mix. But today, given what we're seeing with the fleet, it's about 5, but that is not, Jamie, to your point, that is not a cap, right? That is -- it's not a clinical cap, it's not an operational cap. I don't think we'll see 6 treatments per console per day on the floor, but the 5 is not a cap.

Right. I think a capital consumable stories. And as utilization goes up, that's an indicator that there's going to be more demand for consoles. Does the 5 -- your treatments per week, does that give you visibility that, okay, you stratify by customers, but those ones that are at 7 or 10, whatever it may be, they're getting close to being ready -- visibility?

Yes. That's a good question, Jamie. And it's not quite correlated because we have heavy ICU customers who at 2 just because of the way they run their ICU, they are they are tapped out, right? So our focus, it isn't really utilization directly drives the next console sale. It is the use case within the hospital. We have -- in our past, we've had customers who maybe just started in the ICU and then they expand it to the bedside. And so their aggregate utilization actually fell on average across the system, but they bought more Tablos because the use case for those machines is different, right? So the direct -- there's no direct correlation between utilization and Tablo incremental Tablo purchase. It's site specific. And it really comes back to facilities as these outsourced contracts [roll off], they want to harvest the benefit of Tablo at that next facility next facility.

Okay. I want to give if it's enough time on home. So just 1 more quick 1 on we can keep you quick. Just the ASP benefit you talked about in the first quarter, is ASP a sustainable level for you guys? Or what are you seeing there?

So a couple of things. One, we talked about this notion of disciplined pricing, right, which is where we are very, very focused on making sure that we are not giving away the value of Tablo. So we're harvesting. We're not discontinuously. We're not doing another company, even I have work, you get customers who call you and say, "Hey, the end of the quarter, when you give me to take a deal, we don't broadly do that sort of thing, right? So we've been able to keep the value of Tablo sort of high. And that has persisted in fact. The other from an ASP perspective, the other thing we're very proud of is we've launched 2 accessories. One is a software accessory that allows Tablo to run 24 hours that came out in 2020. That product adds value to customers. We monetize it and we talked about that being now in a majority of the consoles we sell, right? So that feels our 24-hour software feature has done well for us since launch. That kind of feels sustainable. And then we launched our latest product, the TabloCart. TabloCart is -- gives you more water prefiltration, gives you more mobility -- and that product is brand new. We just launched it in Q3. So we haven't guided to how we think it Will do. But out of the gate, it's selling really, really well. And so our strategy to make sure that we can preserve ASP benefit as the -- continue to be disciplined on pricing and then to build and sell add-ons, accessories, whatever you want to call them, that provide value back to our customer and that we can monetize.

Okay. So lets go to the home setting, Leslie, over the years, she's been pretty consistent in making sure those rights and not getting ahead of yourself, it feels like things are starting to pick up. How would you characterize where we are in the home launch and potential acceleration ahead.

Yes. Look, we are really happy with the way our home business performed last year where we more than doubled the installed base. We entered '22 with 300 consoles in home and transitional care units. Exited '22 with 800 consoles and home and [ TCUs ] -- really happy with the way last year went, really happy with the way the first quarter has gone, it's well set up for kind of meeting our expectations and contributing to our expectation that we'll grow 25% to 30% year-on-year. And over the long term, Jamie, I mean, nothing has structurally changed for us on home. Home health, the Uber macro remains a trend from coming into our neck of the woods, the emerging -- the ETC model, the ESRD treatment choices model that continues to be a topic conversation with providers, who do want to avail of the benefits that, that model offers. We aren't yet a lot of direct competition. I mean we're obviously monitoring. We're obviously ready, but we're not seeing a lot of direct competition. And again, the market itself is massive. There are 600,000 people on dialysis today. If only 30% of them can go home, it's a $9 billion opportunity. So over the long run, we continue to have a ton of conviction in our ability to grow into this market.

Where are you in terms of the partnerships that you've established? And a similar question I asked on the acute care side. What's their capacity like that embedded potential growth among existing partnerships -- and then anything you can say on pipeline of future.

Yes. Yes, a couple of questions in that. No, no, no. So first of all, strategy is broadly the same. It's land and expand, right? And if you think about the home customer universe. There's largely 3 segments, if I may. So first of all, it's everybody, but the large dialysis organizations. These large dialysis organizations, the big 2 control about 70% of market. And so these others, we call them MDOs or midsized dialysis organizations, they are like 30% of the market, which is still a large number of patients. One example of Satellite a name we've press released before, right? And 1 strategy that we have is we go where the patients are. So we sell to them. It's very much land and expand in that customer segment. One of our goals this year that we've talked about is that we will be, we'd like to be in the majority of those MDOs, right? So that's kind of that 1 segment. Then we have these nontraditional dialysis providers the poster child, again, when we press released this drive -- we press released, I think last year might be year before. They're a value-based care provider, a kidney care provider, and so they decided that the best way for them to harvest economics back for their system is by doing home dialysis with Tablo. And then the final element is hospital to home, which again is an offshoot of our land-and-expand strategy. So just from a pipeline perspective, all 3 are in play and the 2 goals we talked about for the year on the midsized dialysis organizations getting to a majority and on hospital to home, getting 2 large health systems stand-up home programs. Now from a more sort of -- you talked about the partnerships, 1 of the goals we laid out last year was to get a 100 home programs up and running. And a program in very simple terms is a location that's signed a contract is all set up to send patients home, right? Super simple terms. We achieved that. And now we're obviously still signing and building out more home programs, but we're also focused on depth of the program. We have programs who have started to send double-digit patients home, which is really encouraging because the USRDS average for home programs is low single digit. So we don't yet know what the cap is. We don't yet know the capacity is. We're still early, but we're really, really encouraged by these green shoots of programs that are doing significantly more than the USRDS average. So sort of everything is pointing in the right direction, realizing that there's again a lot of growth here that we can still achieve.

And what's the value proposition you're pitching to these MDOs? Just -- is it a revenue opportunity for them? Is it clinical outcome, COGS?

Yes. the short answer is all of the above. So these MDOs, remember that they compete under the shadow of these 2 behemoths, right? And so what we pitch to them is, number one, they can have a differentiated offering relative to the LDOs. They can use a device where the retention rate is much higher. Remember, that our device, the attrition rate is roughly half of what the incumbent device in our space, the incumbent home [indiscernible] device was. So guys, you can send patients home with a device that actually keeps patients treating longer. You can send patients without having to add to your clinic infrastructure, clinics are capital intensive. There's a utilization in the clinic that really matters. You can send patients home add to your census using our device and not have to compete head to head with 1 of the large players, right? You're competing in a differentiated way. And then what we tell these MDOs is the emerging -- the [ ESRD ] treatment choices model that is going to either add incremental reimbursement or penalty if they don't get enough patients home by 2026, 2027, you guys are going to have to comply with that 1 way or another, why don't you start sending patients home with Tablo, which allows you to harvest those benefits. And by the way, because our retention rate is higher, those patients will stick around longer, giving you an even better shot at getting those benefits. So the pitch is a differentiation relative to kind of incumbent players, if you will, or large players. And the pitch is economic, centered around our better retention rates of incumbent device..

I think you've spoken a little bit about marketing efforts in home. How do you think that will play out? And then tied to just the growth algorithm, what does that do to growth? How should we think about the long-term growth trajectory of home?

Yes. From a marketing type to home growth?

Well, I want to hit on the growth piece. That's probably the more important piece. Is marketing and patient marketing kind of an accelerator relative to your trajectory today?

Got it. So we do -- we are very thoughtful about the patient marketing we do today, the direct-to-consumer marketing. We are really focused on doing social media type stuff where we can be very targeted, we can be very efficient with the spend. And we do this marketing in geos where we have a provider who is set up, if you will, to receive those patients, right, once they kind of have decide that they want to explore Tablo, chose Tablo. So that's the focus there. We will explore doing more. But again, 1 of our commitments to everybody in this room is that we want to grow in a way that allows us to both expand gross margin and get to profitability when our gross margin gets to that roughly 50% zone. And so we're going to be very, very efficient with the spend and the time of the spend. Our marketing focus, Jamie, really is around clinicians, right? It's really around making sure that clinicians understand the benefits of Tablo, the benefits of home where many of them haven't even been taught about home dialysis and their fellow ships. And then look, coming back to growth, we are -- we have a lot of conviction that our growth in the home is going to be linear markets, all the stuff I shared before, massive markets, limited competition. There is reimbursement tailwind here in the medium term. And again, there is a clear benefit here for patients that -- in this treatment model.

Let's go to gross margins. You've raised your confidence in that this year getting to the low 20s. What's going faster than expected on the gross margin piece?

So we've always talked, Jamie, about gross margin being driven by these 3 things. One is our console cost down program, which is where we look at components throughout the bill of materials and reduce the cost of those components either through engineering or supply chain strategies. That's gone well since we've launched that program, and we expect that to continue. And we have specific line items and specific projects, if you will, that we're executing on well into the future. So that's console costs down going well; two, just as we grow, we pull through consumables; and three, it serves leverage, which, again, we're focused on, some of it will come truly through scale, and some of it will come because we invest in remote diagnostics and remote repair capabilities. So all of that has gone really, really well for us and continues to, again, go a little bit better than we had expected. The added benefit we saw in 1Q was the better ASP for the reasons that I discussed earlier. So all of that sort of contributes to our increased confidence in gross margin.

Can you talk about the -- just the build-out of manufacturing capabilities and what that's going to do to the cost down piece over time?

Yes. So we stood up our own manufacturing plant in 2020, 2021 in Q1. So all of our consoles come out of our Tijuana facility. And because we control the manufacturing and the supply chain for our consoles, we have an ability to be very nimble in terms of, hey, if we identify this component is cheaper or is lower cost than that other component. We can do the R&D associated with that and cut it into production very quickly. We can be much more nimble, right? So owning manufacturing of the console allows us to be very nimble in terms of bringing lower cost components into our [indiscernible]. The other thing we did here at the end of last year is in-source our cartridge manufacturing. So the cartridges are consumable. It's a lot lower cost than the console obviously. But again, the purpose there was so that we can own end-to-end supply chain through manufacturing so that we're not ceding a profit margin to anybody so that we can be more nimble, whether it comes to resins, whether it comes to components, or manufacturing techniques and capabilities, right? So all of this, the insourcing of manufacturing of both console and cartridge allows us to protect or accelerate margin expansion as we move forward relative to having somebody else control that.

So getting to the 50% target, what are the key levers to potentially pull that forward? Are you trying to accelerate that? And how should we think about the revenue base that's required at that type of 50%?

Yes. So we have now expanded gross margin sequentially for the last 8 quarters. And it's the same, broadly speaking, the same 3 things that we've done in the past that we need to continue to do moving forward. It's working our console cost-down program. It's getting consumable pull-through revenue with the utilization we've talked about and it's delivering on the service leverage that we've talked about. It's those same 3 things, and we have a lot of conviction that [our path from] here to the next 50% mile marker, 50% is not a peak. It's a mile marker, same 3 things, and it is a linear journey. It is a linear journey up and to the right, just as it has been here for the last 8 quarters.

Okay. Let's move to operating margins and just the leverage opportunity embedded in the model. What capabilities do you need to add over time? Just what operating costs are going to be associated with driving growth from here?

Yes. So look, 1 of the commitments we made this year was that we will deliver operating leverage this year and moving forward. So we expect revenue growth of 25% to 30%. We expect OpEx growth, non-GAAP OpEx growth of low double digits. And that theme of operating leverage will continue as we move forward. We have made all the big structural investments we've needed to in the past. We will now add obviously sort of on the edges here and there, particularly in our commercial organization as revenue scales, we'll have to add field service engineers clinical sales reps, again, at a lower rate than we have in the past, expecting leverage out of those lines. We'll continue to make investments in software, in R&D, more specifically in software. And then G&A will sort of tick up with inflationary costs and there's people we need to add here and there. But you will see us deliver operating leverage moving forward.

Do either segment home or acute, if 1 goes better than expected, does that have an impact on operating margins?

We -- so we.

Just from a mix perspective.

From a mix perspective, so acute consoles because they -- we sell the majority of them with our XT software, the 24-hour software, we call it XT. Those tend to have a higher ASP. And so there is some benefit from the drop-through of the higher ASP on the acute. But we are well set up to grow in both home and acute. We expect growth in both home and acute to meet our exit gross margin target of sort of mid-20%. We expect growth in both home and acute to get to our 50% gross margin target here and not too distant future.

Okay. Let's talk about pipeline just for -- you've talked about ASP and just adding capabilities to the system. What should we expect from here in terms of new features and new value being added to the system that can add to the ASP or just the value proposition.

Yes. So you will see us be innovative. Most of our innovation is now focused around software. On the hardware side, we're really focused. That team is really focused on the cost-down program that I talked about earlier. So it's really going to be software. The areas that interest us are EMR connectivity, there's analytics, there's data, there's nothing that we're prepared to announce here. But again, it will be software related. We do imagine that there will be some base and premium things, you can monetize the premium. So expect that kind of thing moving forward.

Okay. Just cash position, cash burn, balance sheet. Where do you think you are to do you expect to need more capital? Just any comments on capital position.

Yes. One of the other commitments we made this year is we will burn less cash in 2023 than we did in 2022. We exited Q1 with a little over $250 million in cash, and another $200 million in total capital under our debt facilities. So that $450 million plus of capital should get us to breakeven.

Okay. Last one, I'll sneak in, just guidance and the expectations you've you set out for this year. Anything you feel like it's changed just in terms of your key assumptions? I know you're not preannouncing or anything today. But generally, you feel like things are going well.

Yes. Look, I'll take you back to what we said in Q1. In Q1, we said that we had the visibility grounded by our backlog and pipeline to raise our guidance to 25% to 30% expected revenue growth. And again, if you think about structurally in the market, nothing has changed because the value proposition still resonates in home and acute. We still don't see competition imminent in both home and acute. The reimbursement landscape in home with the ETC model remains constructive, and there is a lot of macro push towards home health. So value proposition remains unchanged. And we have a lot of conviction in our ability to grow here over the long term.

All right. Great. Well, I think with that, we'll end. Thank you, Nabeel. And thank you, everyone, for joining.

Thanks, Jamie. Thanks, everyone.