Artivion Inc (AORT) 2025 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Artivion second quarter 2025 earnings call. Our host for today's call is Lane Morgan, Investor Relations, Gil Martin Group. (Operator Instructions) . I would now like to turn the call over to your host Lane. You may begin.

Thanks, operator. Good afternoon and thank you for joining the call today. Joining me today from our Artivion's management team are Pat Macin, CEO and Lance Berry, CFO. Before we begin, I'd like to make the following statements to comply with the safe harbor requirements of the Private Securities Litigation Reform Act of 1995.

Comments made on this call that look forward in time involve risks and uncertainties in our forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

The forward-looking statements include statements made as to the company or management's intentions, hopes, beliefs, expectations, or predictions of the future. These forward-looking statements are subject to a number of risks, uncertainties, estimates, and assumptions that may cause actual results to differ materially from those forward-looking statements from these forwards.

Additional information certain risk and uncertainties that may impact these forms of statements is contained from time to time the SEC filings and in the press release that was issued earlier today. You can also find a brief presentation with details highlighted on today's call on the Investor Relations section of the Ativian website. Now turn over to Artivion CEO, Pat Mackin.

Thanks, Lane, and good afternoon, everybody. I'm pleased to report that our strong business momentum continued through the second quarter as we delivered total constant currency revenue growth of over 14% and adjusted EBITDA growth of 33% year over year.

Further, we made continued early progress with our ongoing AMDS launch following FDA humanitarian device exemption approval or HDE approval, and we remain on track with each of our key clinical and pipeline initiatives aimed at expanding our addressable market.

During the quarter, we also took steps to strengthen our balance sheet and meaningfully reduced our net leverage by retiring our convertible note due in 2025, which la will detail further. Our Q2 performance was enabled by continued growth across our product portfolio with exceptional strength in US On-X sales.

From a product category standpoint, On-X revenue increased 24% year over year on a constant currency basis as we continue to take market share globally, with the only mechanical aortic heart valve that can be maintained at a low INR of 1.5 to 2.0.

Based on the proven clinical results of the On-X aortic valve and the growing body of evidence supporting the use of mechanical valves in younger patients, we maintain our strong conviction that the onyx is the best aortic valve on the market for patients under the age of 65 and will continue to take market share worldwide.

Our US On-X performance was particularly strong as we benefited from our continued growth in awareness and adoption of our onyx valves, driven by positive new data and cross-selling opportunities for our initial AMDS launch.

This crossing dynamic in particular has reinforced our conviction in our innovation-driven multi-pronged growth strategy and further strengthen our confidence in both our near and long-term outlooks for growth and profitability.

To that end, stangraft revenues grew 22% on a constant currency basis in the second quarter compared compared to the same period last year. As the US AMDS launch accelerated our growth rate.

Our snack craft portfolio remains a key component of our growth strategy, and we are encouraged by our strong results which are driven by our differentiated portfolio of products focused on the more complex segments of the Sentraft market.

Today, the products in our stankgraft portfolio are sold primarily in Europe, where we leverage our existing direct sales infrastructure to create significant cross-selling opportunities across our unique aortic product offerings.

Our pipeline consists largely of bringing some of these proven products to the US and Japan, representing a significant growth opportunity.

The first of these products is AMDS. As mentioned, we're pleased with the ongoing US launch of AMDS following our recent HD approval in late 204. As a reminder, there are three steps that each center must complete before implanting an AMDS as part of the AMDS launch process.

First, each hospital needs to receive a site-wide RV approval, except in the case of an emergency use. Second, we need to have ADS approved by the hospital Value analysis Committee or the VAC. And 3rd, surgeons must be trained on this device. Reception to the launch has remained extremely encouraging, with more hospitals progressing through the IRB and VAC approval process.

As expected, AMDS revenue grew meaningfully on a sequential basis in Q2, reflecting strong early demand and revenue from initial stocking orders. Meanwhile, feedback from physicians already using the device has been overwhelmingly positive.

Overall, we're encouraged by the early commercial traction of AMDS as we begin to tap into what we estimate to be 150 million annual market opportunity with limited competitive alternatives. In addition, Biooglue grew 4% on a constant currency basis compared to the same period last year, and we continue to see growth with the product in all of our major markets.

Lastly, tissue processing, which has been the category most heavily impacted last by last year's cyber event, increased 3% year over year on a constant currency basis in Q2. As a reminder, a significant portion of our tissue revenues or our synogaph pulmonary valve for which demand outstrips supply every quarter and therefore we hold no inventory.

Due to extended lead times for tissues that were in process or received during the period impacted by the cybersecurity event, there's a backlog of product that has not yet been released. Since last quarter, we've continued to make progress in reducing the backlog and remain on track to clear it by the end of the third quarter.

Looking ahead, we are confident that our tissue business can be a mid single digit grower for the full year of 2025 and over the long term. I'll now turn to the pipeline.

In July, we received an investigational device exemption approval or ID approval from the FDA to begin our US pivotal trial for our CO LSA. This is our third generation frozen elephant trunk used to replace the entire aortic arch. The trial will evaluate the safety and effectiveness of our CO in the treatment of acute and chronic arch pathologies and enroll 132 patients in up to 30 sites.

We are optimistic that the trial would be successful, which is supported by the positive clinical results from our current generation frozen elephant trunk called the Vita Open Neo. We look forward to providing additional updates on future calls as we prepare to launch the trial by year end. While the HD enables us to commercially distribute AMDS in the US prior to receipt of the PMA, we continue to focus on securing the PMA for AMDS.

Last quarter we were pleased to have been informed by the FDA that it completed its review of our manufacturing and quality management system modules. To date, we've already filed 3 of the 4 modules and we're keeping our, this keeps us on track for an FDA approval in mid 2026.

Lastly, on our pipeline, assuming we acquire Endospan, Nexus remains on track for approval in the second half of 2026. As I spoke about during the Q1 call, Endospan presented its late-breaking 30-day data from the [NexusSIDE] trial at AETS in early May.

This is the first FDA trial for an endovascular treatment of chronic dissections in the aortic arch, focused on patients at high risk for open surgery. The data indicated the trial would meet its protocol defined primary endpoints of a 63% reduction in major adverse events relative to the comparators.

In our conversations with physicians at AATS, surgeons were generally impressed with the 30 day result and were extremely positive. Surgeons were particularly pleased with the performance across stroke and renal endpoints, which was quite favorable compared to published data for alternative endovascular treatments.

Overall, it was a great quarter. We accelerated our top line growth rate for both Onyx and stents to over 20%. We hit another significant milestone in our pipeline execution with our CAID approval, and we significantly improved our capital structure by eliminating approximately 100 million of convertible debt.

We're excited about our progress to date in 2025 and are confident in our ability to deliver sustainable double digit revenue growth, [TRY E] dot margin expansion and grow at just the EBIT dot twice the rate of constant currency revenue growth. With that, I'll now turn the call over to Lance.

Thanks, Pat, and good afternoon everyone. Before I begin, I'd like to remind you to please refer to our press release published earlier today for information regarding our non-gap results, including a reconciliation of these results to our GAAP results. Additionally, all percentage changes discussed will be on a year to year basis, and revenue growth rates will be in constant currency unless otherwise noted.

Total revenues were $113 million for the second quarter of 2025, up over 14% compared to Q2 of 2024. Meanwhile, adjusted EBITDA increased approximately 33% from $18.6 million to $24.8 million in the second quarter of 2025.

Adjusted EBITDA margin was 21.9% in the second quarter of 2025, and approximately 300 basis point improvement over the prior year driven by improvements in gross margin, leverage in SGNA, and timing of R&D spend.

From a product line perspective, On-X revenues increased 24%, stent graph grew 22%, bioglue grew 4%, and tissue processing revenues grew 3% in the second quarter of 2025. On a regional basis, revenues in North America increased 18%, Asia Pacific increased 15%, EMEA increased 10%, and Latin America increased 7%, all compared to the second quarter of 2024.

Our as reported expenses include approximately $1.7 million in Q2 associated with the 2024 cybersecurity incident, which are excluded from adjusted EVADA. While we have sought reimbursement for some of these costs, the process will take some time. We will exclude any insurance proceeds we receive from adjusted EBITDA as well.

Gross margins were 64.7% in Q2 compared to $64.6% in the second quarter of 2024. Non-GAAP gross margins were 65.1% in Q2 25, reflecting a 50 basis point increase from 2024 due primarily to favorable mix from AMDS HDE revenues in the US and exceptional Onyx growth, particularly in the US.

General administrative and marketing expenses in the second quarter were $57.7 million compared to $49.3 million in the second quarter of 2024.

Non-GAAP general administrative and marketing expenses were $53.4 million or 47.2% of sales in the second quarter compared to $47.3 million or 48.2% of sales in the second quarter of 2024, reflecting a 100 basis point improvement while funding our AMDS [HDE] launch costs.

R&D expenses for the second quarter were $7.1 million compared to $7.5 million in the second quarter of 2024, reflecting timing of clinical expenses. Interest expense net of interest income was $7.2 million as compared to $8 million in the prior year. Other income and expenses this quarter included foreign currency translation gains of approximately $4.5 million.

Free cash flow was $11.7 million in the second quarter of 2025. As Pat mentioned during the quarter, we took action to significantly deleverage our balance sheet by retiring our convertible senior notes due 2025. As we announced in May, we successfully completed exchange agreements to convert approximately 99.54 million principal amount for an aggregate of 4.3 million shares of common stock.

Approximately 460,000 in aggregate principal amount remained outstanding as of June 30 and was settled with approximately 20,000 shares of common stock at maturity on July 1.

Turning to cash and liquidity, we ended the quarter with approximately $53.5 million in cash and $215.6 million in debt, net of $4.9 million of unamortised loan origination costs. We do not anticipate the need to raise additional capital to fund our debt obligations, our investments in our channels, or our pipeline in the foreseeable future.

At the end of the second quarter, our net leverage ratio was 2.2, down from 4.1 in the prior year. And now for our outlook for the remainder of 2025. Given our momentum in the first half of the year, we are raising the midpoint of our full year 2025 revenue guidance and now expect constant currency growth between 12% and 14% compared to the previous range of 11% to 14%.

We expect reported revenues to be in the range of $435 million to $443 million compared to our previous range of $423 million to $435 million reflecting greater confidence in our overall growth outlook and an adjustment to our foreign currency assumptions for the second half of the year.

This guidance range reflects our current estimate the full year 2025 currency impact will be approximately flat to 2024. Given our strong top line revenue growth and success with general expense management through the first half of the year, we are also raising the midpoint of our full year adjusted EBITDA guidance. We now expect adjusted EBITDA to be in the range of $86 million to $91 million compared to $84 million to $91 million for the full year 2025, representing a 21% to 28% growth over 2024 and approximately 200 basis points of adjusted EBITDA margin expansion at the midpoint of our ranges.

This guidance reflects a second half revenue growth rate of 17% at the midpoint. A 2.5% point higher than Q2, driven primarily by the expected normalization of our remaining preservation services backlog in Q3 and the continued sequential growth of AMDS HDE revenues in the US. With that, I will turn the call back to Pat for his closing comments.

Thanks, Lance. So to conclude, we're very pleased with our second quarter performance, which we believe reflects the strength of our highly differentiated and highly defendable product portfolio. We continue to deliver meaningful top and bottom line growth, advance our robust pipeline, and enhance our balance sheet.

We remain confident in our ability to deliver double-digit revenue growth at 2 times the growth of IITA as we expand our presence across markets with limited competition and leverage our existing global infrastructure and cross-selling capabilities.

More specifically, we expect future growth to be driven by the following key initiatives. First, the AMDS HDE launch. We're in the middle of commercializing AMDS in the US and starting to penetrate the $150 million annual market opportunity.

Second, On-X heart Valve Data. We are marketing the Jack, which is the Journal of the American College of Cardiology clinical data showing a mortality benefit in patients under 60 years of age compared to bioprosthetic or tissue valves.

This is a new $100 million dollar annual market opportunity that we will be pursuing with the only mechanical aerotic heart valve that can be maintained in an INR of 1.5 to 2.0.

Third The Nexus PMA positive 30 day data from Espan's Triumph trial. End of span remains on track for PMA approval in the second half of 2026. This data presented in May would, assuming if we exercise our option to acquire ESpan, bring us one step closer to being able to access the annual market opportunity of $150 million.

And fourth, the LSA IDE approval. We're preparing to launch the US ID trial for our 3rd generation frozen elephant trunk for the treatment of acute and chronic dissections in the aorta.

Finally, I want to thank all of our employees around the globe for the continued dedication to our mission of being a leading partner to surgeons focus on Eric disease. With that operator, please open the line for questions.

At this time we will conduct the question and answer session.(Operator Instructions)

Bill Plavonik with Concorde Genuity.

Great, thanks. Thanks for taking my question. Good evening. Just really want to just focus in on the AMDS. I think, last quarter you had made the comment regarding 150 hospitals actively seeking IRB and back. Kind of where are you in that process? Have you added more accounts because I think there's 600 total and are there other KPIs that you're looking at?

And then just secondly, I think really interestingly you talked about the cross selling. I wonder if you could expand on that, what products are they picking up, what type of penetration rates are you seeing on those training sessions, anything to help us kind of give us some color on how that may impact the rest of the business. Thanks.

So Bill, this is Lance. Maybe I'll address the metrics question and let Pat talk about how things are going. So, last quarter we did give. Some nonfinancial metrics to try and give everyone some feel for how the launch was going early on, particularly given that revenue was pretty minimal.

I think we try to be clear with people to not expect us to continue to give that every quarter, and we didn't give it this quarter. I will say that our our pipeline is continuing to build, and those metrics had I given them would be larger this quarter than they were last quarter. But probably leave it at that and then I'll let Pat talk about how the launch is going.

Yeah, so, and also just a correction, there's about 1,000 accounts that you mentioned 600.

I think on previous calls we've commented that about 80% of the, 75% of the volume is in the TOP600 centers, but there's about 1,000 accounts that do acute Type A's in the US, as far as your question about cross-selling.

We're doing trainings every month, where we bring, up to 20 surgeons to these centers to learn. It's a one-day program to learn how to implant the AMDS and we're obviously building relationships with those customers. Some are existing customers, some are customers we haven't, they may buy biolue but may not buy our Onyx valve.

And as they get to understand the AMDS technology, and then they understand the Onyx. Technology and the new data, we've literally had customers leave the AMDS training and start using Onyx when they get back to their hospitals. So we thought there'd be some cross selling benefit. It was a little more profound than I than I thought it would be kind of as quickly as that.

Great, thanks. And then if I can ask one more, I will. It's just bio glue in China. There wasn't really any commentary on that. Just wondering if you could give us an update there and thanks again for taking my questions.

Yeah, so when we when we talked about the launch of Vioglue, we said it was really a second half, 2025, given the, all the kind of hoops you have to jump through with the provinces and the hospital contracts, etc.

So, we should start seeing Bao in the second half of this year. So we really haven't talked more about it than than what we've previously put out.

Your next question comes from John McAulay, Steel.

Hi Pat and Lance. Congrats on the strong 2Q performance. Just wanted to start off on guidance. There's a few moving pieces. I just want to make sure I have this right. There's currencies moving towards flat impact for the year. There's two outperformance, but you're also feeling pretty strongly about 225. Could you just talk through how all those dynamics are impacting the updated guide?

Yeah, I think, high level simple way to think about it is if you look at the second quarter, we had given people a midpoint expectation of 13% constant currency growth for the second quarter. We came in at 14.5, so obviously that was above that. That was good underlying strength. Our currency assumption also turned out to be conservative for the second quarter, which I'm sure people have seen that with the EUR dollar in particular has done.

And so that drove some of the outperformance in Q2 on an as reported, top line revenue number. And then at this point, I think we we needed to just acknowledge that currencies has moved in a in a pretty positive way. And go ahead and build a little bit of that into our guidance for the second half. So that, those are at a high level, the moving pieces, but you can see we also moved up our full year expectation for constant currency revenue to 12% to 14%.

Got it. That that's helpful, and I wanted to follow up on AMDS. I know Bill just asked about it, but we've recently done some checks in that space and Just wanted to get your sense on physician adoption and utilization. What we've heard is that once doctors get this in their hands, they're not really feeling a sense of caution that it's a new device. They're excited about it and they're they're sort of immediately integrating it into their practices. Can you just talk about what you're seeing from that dynamic? Are physicians steadily ramping? Are they adopting immediately? Any thoughts that would be helpful. Thanks.

Yeah, so I think I think one of the, and we've kind of reiterated this on previous calls. I think one of the real advantages of AMDS is it's a simple, elegant solution to this problem.

It solves a big clinical problem for patients, which is mal perfusion. We were hearing case after case of, patients coming in with, mmal perfusion based blood's not flowing where it's supposed to go with legs not showing up on MRIs or CT scans, no blood flow, and then they put an AMDS in and the patient's got blood flow back to their legs. .

So it's an amazing device, but it's super simple. We do a one-day training. We want to make sure we're very clear about people how to size it, how to implant it.

But after that, it's super simple, it's easy. And I think that's one of the real benefits is that, every aortic surgeon in the US or a surgeon that puts aortic valves in can use this device and be and it can be effective for them. So, unlike some technologies that are super complicated to use, this is not one of them, and I think that's going to be one of the real benefits of the product going forward.

Thanks for taking the questions. Frank Takkinen, Lake Street Capital.

Hey, this is Nelson on for Frank, and thanks for taking the questions and congrats on all the progress here. Obviously we've talked in the past about AMDS and future launches kind of layering on to the existing sales force. Maybe just talk a bit more about that. I think the last I saw was the 55 person commercial team handling the lamps, and correct me if I'm wrong there, but I understand it's still early innings, but any incremental targeted expansion that you're looking at kind of now, or is that something you maybe take on with PMA approval?

Yeah, so we, we've talked previously. I mean, we don't really see a huge difference with the PMA approval. I mean, other than not having to get an IRB, but I think the point you bring up is a good one, right? So I mentioned earlier on the on the first question, there's about 1,000 centers that do AMDS implant that can do an AMDS. They do acute type A dissection surgery.

We're pretty strong. Our team of, 50 plus reps is pretty strong in the TOP600 centers. We sell things in ALL1,000, but it's not the last 400 aren't exactly a top focus for us. So that is something we're evaluating, maybe in the second phase of the launch, but we're not going to get into specifics on this call, we talk about that more when it happens down the road.

Right, makes sense. Thank you. And then on CO maybe just walk us through kind of the next steps there with ID approval in hand and I heard you say you expect to start that trial kind of by year end, but maybe just any additional color you can provide there on. Timeliness.

Yeah, so we, we're super excited to get the approval, so we got FDA approval. Now it's just like any clinical trial in the medical device space.

We've got to get contracts with the hospital. We have to get an IRV with the hospital for the trial.

We've already got devices, sterile devices coming in, so. It's really just how long it takes us to get through the contracting and the IRBs at the hospitals, and we expect to enroll our first patient before the end of the year.

Perfect. All right, thanks again guys. Congrats.

Your next question comes from Suraj Kalia, Oppenheimer.

Hey Lance, this is Jacob on for Sara. Thanks for taking the questions and congrats on the quarter. So I just wanted to start off with your guide to adjusted Eva growing about twice as fast as the top line, which suggests a shift in mix. Could you help break down what's driving that leverage, and I guess more specifically, what's the expected contribution from the MDS launch on gross margin expansion and how accretive do you see that being over time?

Yeah, so I think things are planned out the way we expected at the beginning of the year. We talked about the EI margin kind of coming from both SGNA leverage, but also that we thought we could get about a point of gross margin expansion this year, primarily due to mix and so far that's, we're starting to see that play out. We had about 50 basis points of gross margin expansion this quarter early on in the launch. So we do think that that can drive gross margin expansion going forward, which can be another enabler for I down margin expansion.

This year we are making sure that we invest every dollar we need to in this launch to make sure it gets off to a great start, so it's probably not quite as much drop through, but if you look in the outer years, I mean this is an extremely high gross margin product that's being sold through the exact same salesforce, so we expect it to be a significant contributor to EBITDA in the future.

Yeah, no, that's very helpful. And then just on on X, so it's been a consistent growth driver for the past few years, how stable is that business looking ahead and really on that note, can you provide any directional color on what's embedded in the guide for On-X and the stent graph portfolio?

Yeah, I'll take the first part. We've Ever since we launched Little INR for the Onyx Valve, which was when we acquired the company back in 2016, we've consistently grown that business double digits. I think the Ker over the last seven or eight years is like 12 or 13%. I talked about on the last call that we've got a bunch of things going in our favor. We've got the only indication for low INR.

We've got the AMDS launch with the cross-selling opportunities I just mentioned earlier. We've got the 5 year post-approval data that shows an 87% reduction in major bleeding. And then there was a paper presented at STS in January showing if you get a mechanical valve under the age of 60, you have a mortality benefit versus a tissue valve.

So we haven't even started marketing that to cardiologists and the business is growing over 20%. So we're seeing a kind of an acceleration of Onyx based on all those factors, and we're not going to break out, what we're thinking for in the back half. I mean we have the segments we report against. But it's been obviously very robust.

Yeah, and I think on the guidance thing, we're not going to get into the nitty gritty on what's the change, but at the beginning of the year we laid out kind of our standard set of parameters of, how we think about the different product lines growing longer term with, kind of bio glue and tissue is a min single digit growth rate businesses and onyx is a low double digit and stent graphs before taking into account AMDS in the US It's kind of a mid-teens business and then, US AMDS adding incremental growth over that. And then, since then we've moved our midpoint up twice, in both of the 1st and 2nd quarter call, and I would, I think I would just say, definitely the Onyx performance in the US and the strength we're seeing in that business. Is definitely a big contributing factor to our ability to raise the midpoint.

Your next question comes from Mike Matson with Needham. Your line is open.

Hey guys, how are you doing today? This is Joseph on from Mike. Maybe to just start off with Onyx, I mean you guys called out stocking orders, for AMDS. I was curious if there was any kind of 11 timers that affected Onyx in the quarter, as you said, there was, cross selling you guys are seeing cross selling opportunities with AMDS and Onyx. So just wondering, yeah, if there's any one timers in the Onyx or is this all data and, awareness driven.

Yeah, so the fastest growing, the biggest market and the fastest growing market is in the US, and we don't do any bulk deals, we don't do any, you know. Kind of the individual sales it's all off consignment and use, so. The big chunk of that growth rate is coming off implants.

Okay, perfect, and then maybe just a quick one, on the artisan trial, appreciate the color you guys have given so far. I'm just curious maybe a little bit more on the on the trial what does you know follow up time look like? Is there any idea on, when data readouts could be and I guess just given, the complexity of the procedure. Does it take a while to train surgeons who opt into this trial? Has training like that already, happened with you with Arti on?

Yeah, so this is a, once again, it's a little bit like my comments on AMDS. I mean one of our mantras at the company is to come up with simple, elegant solutions and improve outcomes.

AMDS is kind of a poster of that. The our CO device, which is the trial called Artisan, it's the first frozen elephant trunk device that has a branch subclavian feature on it.

That's going to make the procedure easier.

So it's important to note all the surgeons in this trial.

Already performed frozen elephant trunk operations.

They use a competitive device.

We think ours will be easier to use, faster and provide better outcomes. So, we don't think that is, there'll be there'll be hands-on training because they have to get familiar with our delivery system and the new device, but it's really not a huge training lift, so we expect this trial to ramp pretty quickly.

Okay, thanks very much and congrats on the quarter. You guys, very strong.

Thanks.

Your next question comes from Destiny Hans with Leydenberg Follman. Your line is open.

Hey, thank you for taking the questions. Just one for us, and I'm sorry if I missed it, but serious. If you could talk about some pricing trends, and if you're seeing any, changes in pricing and power there.

Yeah, so that your question is just an overall question about pricing environment and what we're seeing, is that correct?

Yes, please.

Yeah, I mean, we've talked about this before. I mean, the nature of our devices is, they're generally life saving and not super high volume from a individual line I'm in the hospital and because of that we typically have not seen price pressure and have really had an ability to drive, modest inflationary type price increases consistently over time. And that continues to be the case. Now I know in previous years we've had some kind of exceptionally large price increases in individual products. We don't really have any of that going on at the moment. This is really more volume-driven with just kind of normal inflationary price benefit.

Great.

Thank you.

I appreciate it.

Your next question comes from Dan Stauer with Citizens JMP. Your line is open.

Yeah, hey, great, thanks for the questions, I just had a few, quickly, so following up on the on X growth.

It's been talked a lot about, but I just wanted to TRY to get a sense of how much of it was due to those cross selling benefits. It seems like the business is still really strong beyond that, but could you give us any color on how much of the quarter's contribution was from new accounts from that halo effect of AMDS and maybe if you have any metrics on higher utilization for on X, that would be really helpful.

Thank you.

Yeah, so we're not going to get into the nitty gritty on utilization, but I will say definitely there was a meaningful uptick from new accounts. Now is that due to cross selling or due to the new data or a combination of both, like that's really hard to tease out, but it's not just increased utilization in our existing customer base. It is definitely also driven by new customers.

Okay, that's great. And then, just want to follow up on free cash flow, great improvement during the quarter. I just wanted to get a sense of how we should be thinking about it for the back half of 25, any cadence we should keep in mind and any more notable cash items that we should be thinking about for the rest of the year.

Yeah, I will say, timing of cash can make things fluctuate quarter to quarter, but you know what we've said consistently and we still say is that we expect to be positive for the full year.

We did have a really good quarter this year, this quarter, which we needed to because some of that was catch up from Q1.

I would say year-to-date we feel like we're in a pretty good spot to deliver on our objective of being free cash flow positive for the full year.

Great, thanks for the questions and great work.

Thanks.

Mr. Mackin, there are no further questions at this time. I would like to turn the floor back over to management for closing remarks.

Well, thanks for attending again, we're super excited about the quarter.

We appreciate you all joining.

We've got a lot of momentum. We're growing double digits. We're going twice as fast on the bottom line.

We're generating cash. We delevered, and we've got a lot of growth drivers we talked about a new clinical trials starting, so, we're super excited and look forward to reporting on again next quarter.

This concludes today's call.

Thank you for attending and have a wonderful rest of your day.